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 22nd, 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 22nd,
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 21st, 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 21st, 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 21st, 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.
