Houston — Ramaco Resources said it sold nearly 2.15 million st of coal in 2018 at an average sales price of roughly $78/st, up threefold from 608,000 st sold in 2017 at approximately $66/st, the company said Monday.
In a preliminary quarterly earnings statement, the Lexington, Kentucky -based company reported production of 1.75 million st in 2018 at an average production cost of $63-$64/st, up from 519,000 st produced a year earlier at an average production cost of $73/st.
Ramaco generated $227.57 million in revenue in 2018, up from $61.04 million in 2017, while net income is expected between $23.5 million and $24.5 million, compared with a loss of $15.42 million a year ago.
On November 5, a storage silo at the Elk Creek coal complex suffered internal structural damage, but the company was able to install a temporary conveying system less than a month later.
"Our permanent belt workaround at Elk Creek is now complete and we are operating today at roughly 80% of processing capacity," President and CEO Michael Bauersachs said in the statement. "Our final silo rehabilitation is projected to be completed early in the second quarter of 2019 at which point we expect to return to full capacity."
Bauersachs said that the company?s raw coal inventories at Elk Creek were at 330,000 st at the end of 2018 and over 430,000 st at the end of January 2019, which resulted in additional handling costs.
"Due to not being able to wash coal while we addressed the silo failure, coupled with the exceptional productivities and mining conditions that we have experienced thus far in the first quarter, we have built an unprecedented amount of raw coal inventories," Bauersachs added.
2019 GUIDANCE
Ramaco said it expects coal production to be between 1.8 million and 2.2 million st in 2019, including 1.6 million-1.9 million st at its Elk Creek complex and 200,000-300,000 st at its Berwind Development Deep Mine.
"The company will continue to do development mining throughout 2019 at our Berwind complex as we move towards the high value, low cost Pocahontas #4 seam, which it anticipates reaching in the spring of 2020," the statement said.
Average cash cost per ton will range between $63-$69/st at the Elk Creek complex and $120-$135/st at the Berwind mine.
The sales mix is estimated to be 1.9 million-2.25 million of metallurgical coal and 100,000-150,000 st of thermal coal.
Over 1.97 million st of the estimated 2019 production has been committed, with 1.6 million st locked at an average price of $113/st. Of the 1.6 million st locked, 1.52 million st was sold into the domestic market at an average price of $113/st, while an additional 109,000 st is fixed into the export market at an average price of $122/st.
An additional 350,000 st has been committed at index pricing, including 230,000 st to domestic customers and 120,000 st in the export market.
"We anticipate selling the balance of our 2019 met coal production principally into the Atlantic export markets," said Chief Financial Officer Randall Atkins. "Five percent of our overall 2019 production tons at Elk Creek are steam tons, which are projected to be sold on a spot basis."