Ramaco Resources sees FY19 production of 2.0M tons of met coal
The company said, "We are excited about Ramaco's long-term prospects for growth, free cash flow generation and ultimately the ability to return cash to shareholders through regular dividends. In 2019, we expect to produce 2.0 million tons of met coal at the midpoint of guidance, up approximately 14% from 2018 levels. We ended 2018 with overall average costs of roughly $63 per ton, allocated as $60 per ton average cost at Elk Creek and $127 per ton at our Berwind development mine. In 2019, it will be important for investors to focus on the cost difference between the two complexes. At Berwind, we will still be in development mode in 2019, mining approximately 250,000 tons in thin seam conditions in the Pocahontas #3 seam, until we reach the thicker roughly 60" Pocahontas #4 low-vol coal seam by 2020. At full capacity, we expect Berwind mine costs to be closer to $80 per ton and production at roughly 750,000 tons. At today's pricing, we'd ultimately anticipate Berwind cash margins at that point to be similar to Elk Creek. At Elk Creek, we expect costs this year in the mid-$60s per ton range, with the increase mainly caused by higher-sales related costs associated with improved sales realizations. As Berwind ramps up production, and Elk Creek continues to produce as expected, even without any proposed development activities, we hope to reach a 2.5M ton annual production rate in 2020 which should increase to approximately 4.5M tons by 2023 through investments in organic growth at our existing properties. As production increases, we anticipate exploring with our Board the possibility of returning cash to shareholders in the form of a recurring dividend."