RAMACO RESOURCES, INC. DUAL-CLASS STRUCTURE UPDATE

Rhea-AI Summary

Shares of Ramaco Resources, Inc. Class B Common Stock began trading on NASDAQ under the ticker symbol 'METCB'. The company believes this new structure will create additional value for shareholders. However, NASDAQ adjusted the historical prices of METC by approximately 18.2%, leading to a reduction in market value. The market cap of METC decreased by roughly $70 million, the trading multiple decreased from 4x to 3x, and the dividend yield increased to just under 6%. The company created the Class B security to capture the true value of its CORE assets and increase total company share value. The CORE assets are expected to pay a cash dividend of $8.5 million in 2023. METCB holders are eligible to receive a dividend based on 20% of CORE income.

Positive

• Shares of Ramaco Resources, Inc. Class B Common Stock began trading on NASDAQ under the ticker symbol 'METCB'. The company believes this new structure will create additional value for shareholders. The CORE assets are expected to pay a cash dividend of $8.5 million in 2023. METCB holders are eligible to receive a dividend based on 20% of CORE income.

Negative

• NASDAQ adjusted the historical prices of METC by approximately 18.2%, leading to a reduction in market value. The market cap of METC decreased by roughly $70 million, the trading multiple decreased from 4x to 3x, and the dividend yield increased to just under 6%.

LEXINGTON, Ky., June 23, 2023 /PRNewswire/ -- The shares of the Class B Common Stock of Ramaco Resources, Inc., ("Ramaco" or the "Company"), began trading on June 22^nd, 2023 on NASDAQ under the ticker symbol "METCB." The Class B common stock provides holders of METCB with direct participation in the financial performance of what the Company calls the "CORE" assets, which is an abbreviation of "Carbon Ore-Rare Earth."

The Company views the CORE assets as a unique group of assets which are distinct from its metallurgical coal mining operations. By creating a separate stock that will participate in the financial performance of these assets we feel it will unlock additional value to both the Company and its shareholders.

It is important to note that, effective at the commencement of trading on June 22^nd, 2023, NASDAQ made a decision, independent of the Company, to adjust downward the reported historical prices of METC by approximately 18.2%. That NASDAQ change has given rise to substantial questions from investors, particularly those holding the Class A Common Stock (NASDAQ: METC). This press release is being issued in an attempt to address many of these questions. 

Investors should note that the addition of the Class B common stock does not cause a reduction in the Company's net income, Adjusted EBITDA, or impact any potential future dividends for holders of the Class A Common Stock of the Company (METC). Indeed, the Company believes this new structure will create new additional value for shareholders of both classes of stock.

We believe that the market may be valuing the Class A Common Stock based upon NASDAQ's adjustment of previously reported historical prices and not based upon the fundamentals of the Class A Common Stock (METC):

• Market Cap of METC: As of the close of trading on June 21^st, 2023, the market cap of the Class A Common Stock (METC) was over $430 million. It is currently roughly $360 million. This reduction in market value occurred despite no change in METC's historical and forward earnings profile, share count, and dividend policy compared to the period before Class B Common Stock (METCB) began trading. There was a roughly $70 million reduction in market cap.
  
  
• Trading Multiple of METC: As of the June 21^st, 2023 closing price, the Class A Common Stock (METC) was trading at a price to earnings ratio of 4x based on its full-year 2022 diluted earnings per share. It is currently trading at a price to earnings ratio of 3x based on these same metrics.
  
  
• Dividend Yield of METC: As of the June 21^st, 2023 closing price, the current dividend yield for holders of the Class A Common Stock (METC) was 5%. Based on an 18.2% reduction in price, and no change to the METC dividend policy, the current dividend is just under 6%.

The Company believes that the value the market placed on the CORE assets prior to the Class B creation did not capture its true value. This is especially true given the lower risk profile of the more stable coal royalty and infrastructure income streams. Nor did it reflect the unique potential royalty income from the Company's potential future mining operations in Wyoming, involving our recently announced rare earth elements deposit discovery.

Due to these factors, the Company created this new Class B security which, we believe, should be valued similarly to other royalty companies potentially increasing both total Company share value and provide additional long-term capital returns.

• As a reminder, CORE is expected to pay a cash dividend, which equals $8.5 million on a 12-month basis for 2023. This is based on the expected financial performance of the CORE assets which consists of three non-cost-bearing revenue streams. Any dividends on the Class B common stock will be based on the revenue generated by the CORE assets. 
  
  
• Since 80% of the income generated by the CORE assets will be retained by METC, we believe that the performance of the CORE assets should be directly accretive Class A common stockholders.
  
  
• METCB Implications for METC Holders: Based on the current stock price, the market cap of METCB is roughly $100 million. This is based only on the 9.4 million fully diluted shares. METCB holders are eligible to receive a dividend based on 20% of CORE income, whereas the other 80% of income is retained by the Company.

ABOUT RAMACO RESOURCES

Ramaco Resources, Inc. is an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia, southwestern Virginia and southwestern Pennsylvania. 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 which contains large deposits of rare earth elements. Contiguous to the Wyoming mine the Company 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 http://www.ramacoresources.com. For more information, contact investor relations at (859) 244-7455.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Ramaco Resources' expectations or beliefs concerning guidance, future events, anticipated revenue, future demand and production levels, macroeconomic trends, the development of ongoing projects, costs and expectations regarding operating results, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Ramaco Resources' control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. These factors include, without limitation, risks related to the timing of the mining discussed in this release and the Company's ability to successfully pursue such mining. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Ramaco Resources does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Ramaco Resources to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Ramaco Resources' filings with the Securities and Exchange Commission ("SEC"), including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The risk factors and other factors noted in Ramaco Resources' SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.

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SOURCE Ramaco Resources, Inc.

FAQ

What is the ticker symbol for Ramaco Resources, Inc. Class B Common Stock?

The ticker symbol for Ramaco Resources, Inc. Class B Common Stock is 'METCB'.

What is the expected cash dividend for the CORE assets in 2023?

The expected cash dividend for the CORE assets in 2023 is $8.5 million.

What percentage of CORE income will METCB holders receive as a dividend?

METCB holders are eligible to receive a dividend based on 20% of CORE income.

How did NASDAQ's adjustment of historical prices affect METC?

NASDAQ's adjustment of historical prices led to a reduction in market value, with the market cap of METC decreasing by roughly $70 million, the trading multiple decreasing from 4x to 3x, and the dividend yield increasing to just under 6%.