December 5, 2018 - Ramaco Resources, Inc. (NASDAQ:METC) (“Ramaco” or the “Company”) announced today that on November 30, 2018, the Company finished installation and commissioning of a temporary conveying system at its Elk Creek plant in West Virginia. The first temporary conveying system will allow the Company to bypass the now damaged raw coal storage silo, which has now been demolished, and allows for the immediate processing and shipping of coal, subject to rail availability, at an estimated 55% to 65% of the entire plant capacity, throughout December 2018.
The first temporary bypass system will provide the primary feed to the plant while the Company designs and fabricates permanent modifications to the two existing silos.
The Company is in the process of fabricating a second higher capacity bypass system that is expected to provide a secondary conveyance system which will operate at approximately 80% of capacity with increased reliability compared to the temporary system. This second bypass system is expected to be completed in early January 2019, and at that time the temporary system will be decommissioned. This secondary conveyance system will remain on a permanent basis. The Company anticipates completion of the silo modifications late in the first quarter of 2019, at which time it expects to resume full normalized feed to the plant through the original conveyance system at 100% of capacity.
The Company declared force majeure on contracts for coal deliveries from Elk Creek on November 7, 2018. While it continues to operate under declarations of force majeure, the Company intends to notify its customers that it anticipates beginning shipments during the week of December 3, 2018.
The Company does not anticipate significant adverse financial impacts on 2019 coal sales from the silo failure and its immediate aftermath. The Company continues to operate and produce at its Elk Creek mines at planned levels. While the Elk Creek complex will build substantial coal inventories while continuing to recover from the silo failure, the Company anticipates that it has sufficient raw coal storage capacity to meet its inventory requirements.
The Company projects having sufficient liquidity to continue to operate its mines, implement the improvements to the conveyor systems at the Elk Creek plant, and fund its 2019 business plan.
Randall Atkins, Ramaco Resources' Executive Chairman stated, “We are delighted, that due to the ingenuity and hard work of our operating team at Elk Creek that we are in a position to begin processing and shipping coal again. We look forward over the coming months to bring our processing capacity back to normal and to a strong 2019 both operationally and financially.”
Ramaco Resources is an operator and developer of high quality, low cost metallurgical coal in southern West Virginia, southwestern Virginia and southwestern Pennsylvania.