管理層發言
Good day. And welcome to the Ramaco Resources First Quarter 2026 Results Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Jeremy Ryan Sussman, Chief Financial Officer. Please go ahead.
Thank you. On behalf of Ramaco Resources, I would like to welcome all of you to our first quarter 2026 earnings conference call. With me this morning is Randy Atkins, our Chairman and CEO; Christopher L. Blanchard, our EVP for Mine Planning and Development; Jason T. Fannin, our Chief Commercial Officer; and Michael Woloschuk, our EVP of Critical Mineral Operations. Before we start, I would like to share our normal cautionary statement. Certain items discussed on today's call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 2000. These forward-looking statements represent Ramaco's expectations concerning future events. These statements are subject to risks, uncertainties, and other factors, many of which are outside of Ramaco's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made and, except as required by law, Ramaco does not undertake any obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.
I would also like to remind you that you can find a reconciliation of the non-GAAP financial measures that we plan to discuss today in our press release and can be viewed on our website, www.ramacoresources.com. Lastly, I would encourage everyone on this call to go on to our website and download today's investor presentation. With that said, let me introduce our Chairman and CEO, Randy Atkins. Thanks, Jeremy, and thanks to everyone for joining us this morning. I am going to lead off with our shareholder return and capital allocation strategy because since the start of the year, we bought back a significant amount of stock and that has been for the first time. As we said in our release, thus far this year we have repurchased about 2.6 million shares of our Class A common stock. At an average price of about $14.50 per share, that represents about 5% of our stock. Our stock currently continues to trade below levels of last year when we issued equity either directly in a stock issuance last summer or indirectly through our convertible notes last fall. We are also now generally trading on a forward basis in line with our met coal peers based on consensus estimates. As a dual-platform company, we are currently seeing very little value in our stock price that reflects our rare earth or other critical mineral assets. So given that backdrop, we are going to continue to explore whether buying shares represents a prudent investment of our current cash capital. As of today, we have got $63 million of additional buying power under the original $100 million authorization, which the board provided last year. We also ended the first quarter with $490 million in liquidity, which was up about 310% year-over-year. Our balance sheet is giving us lots of options to simultaneously consider continued share repurchases, advancing efforts at our Brook Mine, or growth efforts for our low-vol coals. Turning to the met coal business, we continued strong cost control in the same challenging market price conditions we have now endured for the past year. Our miss for this quarter has all been top line. This was the third consecutive quarter of cash costs under $100 per ton. In the face of the rising diesel prices this year, we have managed to accomplish this cost discipline without cutting wages or benefits to our miners, which we regard as the most significant. I would note that on our mine cost, the conflict within Iran has had a related impact, of course, on oil pricing, and has escalated the cost of all of our fuel products. We have seen rack pricing increase to as high as $5.45 a gallon across our operations, which is up from about $2.50 at the end of last year. Based on our historical purchases and usage of diesel and gasoline, on an annualized basis, Ramaco would realize about $1 per ton of cost increase for each dollar per gallon of diesel fuel increase. This impacts not only direct mine cost, but indirectly through third-party transportation costs for both our raw and clean coal. While we are expecting fuel prices to ultimately subside sometime in the second half, at current levels the impact on our mining cost is $4 per ton compared to earlier this year in 2026. Despite our continued solid operational performance, coal markets remain challenged, both in general and especially on pricing, once again especially on the high-vol side. While high-vol prices rose modestly in the first quarter of 2026, we still view current indices as unsustainably weak. One important point that I would like to note, however, is regarding future pricing. We are finally beginning to see some long-anticipated drops in production, both domestically and overseas. We are witnessing everything from bankruptcies, production cutbacks, distressed sale processes, and in all these cases they involve both large public and private producers. By our estimates, almost 2 million tons came out of the domestic market in 2025. This year, we expect an additional roughly 3 million tons or more to follow. At some inflection point, these production cutbacks will create a supply imbalance which will begin to impact pricing, we hope. Our growth plans relating to coal are all about the low-vol markets. Last quarter, we restarted our Laurel mine and we will be adding an additional third section to our Berwind mine this summer. At full production, these projects are expected to add about 100,000 to 200,000 tons of low-vol in 2026 and about 0.5 million tons of production additionally in 2027. Our new rail loadout under construction at our Low-Vol Maben complex is expected to be complete later this year. When it opens, we expect to save about $20 per ton on trucking costs. The loadout, of course, gives us more options when we consider whether and when to start our Maben 1.5-million-ton low-vol deep mine project as market conditions dictate. We have also been a bit quiet for the past few months on our rare earth element and critical minerals front. However, we have not been idle. I expect that in the second half we will reflect and announce a number of milestones. We have principally been waiting on receipt of the revised conceptual study from Hatch, which we expect in late June, as well as the technical geological report summary coming from Weir which will follow. Both of these analyses are based on our new patent-pending carbochlorination processing technique. As we noted last quarter, our internal projections continue to estimate that this new flow sheet process should generate a material increase in incremental revenue and free cash flow compared to our previously published projections by Fluor about a year ago using a different solvent extraction processing technique. With new independent analysis for the carbochlorination flow sheet coming into focus, we have ramped up efforts regarding potential offtake transactions and non-dilutive third-party financings. I will not get into specifics today, but we will make specific disclosures when those transactions are hopefully complete. Advanced discussions are continuing with both domestic and overseas groups, and these include both public and private counterparties. A further note: the subsequent more detailed preliminary feasibility study being prepared by Hatch remains on track to be completed in late 2026. Today in Wyoming, our building structure to house the pilot plant seems to be on schedule to be completed this summer, and the fabricated interior equipment will start installation this fall with full pilot operations starting in 2027, all as previously announced. Last quarter, I also mentioned that we were exploring some reorganization options for Ramaco's overall corporate structure as we move further into our dual platform. This effort is largely in response to anticipating the startup of our critical mineral operations. We have now taken a number of concrete legal and accounting steps to move this forward and have formed separate corporate entities within a holding company structure currently under the parent Ramaco Resources. One new company will be called Ramaco Royalty. This will house all our mineral reserves, infrastructure, intellectual property rights, and other related income-producing assets. This will include our fee-owned reserves of both metallurgical and thermal coals as well as our rare earth and critical minerals. Similarly, this entity will own our infrastructure assets in the East such as our prep plants and rail loadouts. In the West it will own our pre-FEED infrastructure related to the Brook Mine processing facility. It will also include any possible rail infrastructure as well as the critical mineral and storage facility we have been working on with Goldman Sachs. To our knowledge, this will be a unique collection of income-producing assets, especially those relating to rare earths, which will provide us some optionality in the future. The second company will be Ramaco Critical Mineral Resources. This will house the production and sales operation of our Western Brook Mine rare earth, critical minerals and thermal coal mining. Think of this as mirroring the same form of our existing met coal development, production and sales operation in the East, except it will be exclusively focused on our Western critical minerals. The third company will be Ramaco Refining. This will hold the carbochlorination separation facilities to be constructed to process the Brook Mine critical mineral feedstocks into oxides and MREC+. This reorganization is being taken to both ultimately enhance shareholder value and better reflect the different and distinct forms of assets and operations that we both currently have and are developing for the future. Each of these operations has different operating, financial and capital market profiles. Even though for the time being they will all operate under the holding company structure of our parent Ramaco Resources, hopefully this structure will provide more operational and financial flexibility as we develop different and separate production, processing and sales businesses in both the met coal as well as the critical mineral space. We expect to have the pieces in place for this reorganization in the second half of the year, and we will also talk about it further at that point. So with that, I would like to turn the floor back over to the rest of the team to discuss finances and operations and markets. But first, I will ask Michael Woloschuk, who heads our critical mineral efforts, to provide some updates on our rare earth progress. So, Mike?
Thank you, Randy. In Q1, we continued advancing the conceptual study for the carbochlorination flow sheet with Hatch. Key engineering deliverables have been completed and issued in the quarter. The mineralized Brook Mine coal used as a key reagent in this process is estimated to be a significant contribution to rare earth element production as the enriched coal seams are targeted for this duty. We identified opportunities to increase chlorine recycling and we have identified other opportunities that will be included in the final study report anticipated for late June.
While we are continuing third-party metallurgical testing, we placed key analytical and equipment orders to fit out our internal geometallurgical laboratory at the ICAM facility. This will enable a higher volume of test work and assay results to be delivered with faster turnaround times compared to the external labs. We anticipate internal geometallurgical testing to ramp up in early Q2 to support the next phases of this project. Also in Q1, we completed drilling of 33 holes with over 9.3 thousand feet of core. These drill programs include 27 infill drill holes and six water-monitoring holes. We currently have four drill rigs on-site and we anticipate drilling to continue to year-end. In total, we now have drilled 174 holes and 35 thousand feet of core since our program started. Pilot plant building construction activities included completion of the foundation systems to support the floor slab with the overall building expected to be complete late summer and early fall. Our coal storage facility construction has included the completion of the foundation, the stem walls and lateral reinforced tension members. The overall structure is expected to be completed this month. Overall, we remain extremely excited about the Brook Mine opportunity with the carbochlorination flow sheet. We will, of course, be in a position to discuss more about that once we have receipt of the Hatch and Weir reports expected shortly. Our overall timeline remains the same as we have previously disclosed. In the second half of this year, we look forward to making meaningful progress on both completing the pilot plant build-out along with the pre-feasibility study. I would like to now turn the call over to our Chief Financial Officer, Jeremy Ryan Sussman.
Thank you, Mike.
Starting with the balance sheet, I am pleased to note that our record year-end 2025 liquidity allowed us to opportunistically repurchase $37 million worth of shares since the beginning of this year. This effectively reduces our shares outstanding by 2.5 million shares. As Randy noted, as long as we believe that our stock remains substantially undervalued, we will continue to look to opportunistically repurchase shares to our advantage. We ended Q1 with one of the strongest balance sheets in the space with almost $500 million in liquidity. In terms of first quarter performance, as Christopher will discuss, operational results were again solid with cash costs of $98 per ton. All of our primary peers have now reported Q1 results, and I am proud to note that our $98 per ton continued to be in the first quartile of the U.S. cash cost curve among our Central Appalachian met coal peers. This figure is especially impressive considering the dual impact of higher diesel costs, coupled with the weather-related transportation issues that negatively impacted our overall sales figures by 50 thousand tons in the first quarter. Q1 cash margins of $16 per ton fell $24 per ton from the same period in 2025. This was due to lower realized price of $114 per ton compared to $122 per ton in 2025. As Jason will discuss, domestic high-vol markets remain weak. Despite Australian benchmark pricing rising $50 per ton year-over-year in 2026, U.S. high-vol indices fell $20 per ton during that same time frame. Frankly, we view this trend as unsustainable given the level of losses we are seeing among higher-cost producers. Our Q1 production fell modestly from the same period last year as we continue to exercise production discipline in the face of challenging market conditions. In terms of our financial results, Q1 adjusted EBITDA was negative $1.8 million compared to $10 million in 2025. Class A EPS showed a $0.30 loss in Q1 versus a $0.19 loss in the same period of last year. Looking forward, we are reiterating all key 2026 operational guidance including production, tons sold and cash costs. In terms of second quarter 2026 guidance, we anticipate higher shipments between 900 thousand and 1 million tons. We expect cash costs towards the higher end of the full-year range for the second quarter on the back of elevated fuel costs due to the Iranian conflict. As we look ahead, our strong balance sheet and first-quartile cash cost position provide us with meaningful optionality to both invest in our coal and rare earth elements business while also allowing us to continue to opportunistically repurchase shares. In addition, as of March 31, we had over 1 million tons sitting in inventory which will provide us with a meaningful working capital tailwind should markets improve throughout the year as we anticipate. With that said, I would now like to turn the call back to Christopher L. Blanchard, our EVP for Mine Planning and Development.
Thanks, Jeremy. Before jumping into some of our operational metrics and progress over the last few months, I wanted to recognize our coal miners for their significant improvements in safety and compliance in 2026 compared to the same period last year. While we still have much work to do toward an ultimate goal of zero incidents, 2026 year-to-date performance is up 250% compared to the same period in 2025 and is back on a trajectory of continuous improvement that we have had for most of our history. In these challenging market conditions, it does remind us that a safe mine is a productive mine and productive mines tend to be lower cost as well. Turning to those performance metrics, we have been able to maintain acceptable cash costs at our operations despite headwinds on our operating supply costs. Specifically, the run-up in the cost of diesel fuel driven by the Iranian conflict has impacted first quarter costs negatively by $1.50 per ton sold compared to where we otherwise would have been. While fuel prices have pulled back from peak levels, they do remain elevated compared to the beginning of the year and we continue to monitor this closely. Also on the supply side, raw tungsten pricing is up by approximately 350% in 2026 due to Chinese export controls. This has led to nearly a 100% increase in the cost of our mining bits and tools, which particularly impacts our underground mines. We are continuing to work with our key suppliers to mitigate these cost increases and others whenever possible. Given the poor coal pricing environment on the high-vol side of the business, we have moderated production from our Elk Creek complex to both manage physical inventory and to not produce additional tons into a marginal market. We are continuing to monitor the market conditions and may make further reductions throughout the year if they are warranted. However, at our low-vol operations, we continue to work to add new low-cost production and lower our existing operating costs there. At the Berwind complex, the first of two new air shafts is nearing completion into our Berwind Pocahontas No. 4 Mine. The second shaft will be excavated immediately following the first and we expect both shafts online and in operation by late August. This ventilation upgrade will then allow us to ramp to 900 thousand to 1 million clean tons annually. While this ventilation work is still ongoing, during April we brought online our idled Laurel Fork low-vol mine. The ramp-up of this single-section mine is continuing and is on budget currently. Switching to our Maben Low-Vol Complex, we have initiated the Norfolk Southern rail loadout project. All major materials are procured and excavation for the loadout belt is already underway. We expect the unit train loadout to be fully operational in 2026, fully eliminating trucking logistics costs from our Maben Mine and lowering projected cash costs and the railcar costs to the same low levels as the rest of Ramaco's mines. This should also allow the Maben product to move more easily into the domestic metallurgical coal markets as we contract for 2027. Finally, work continues at Maben on permitting and initial development work for the future underground mines planned for this complex. Moving forward, we are continuing to focus on those items which we have some ability to control, namely volume and costs. We are positioning ourselves to quickly capitalize on market improvements, or shortfalls by other producers. For a discussion of the coal and critical mineral markets, I would now like to shift the call to Jason T. Fannin, Chief Commercial Officer.
Christopher, and good morning, everyone. Today, I will discuss our Q1 sales results, provide an update on our 2026 met coal sales position and market outlook, and lastly, cover our Brook Mine critical minerals marketing efforts and progress. Regarding the seaborne metallurgical coal markets, I first want to address Q1 indices and pricing dynamics. Our realized pricing in Q1 was marginally lower quarter-over-quarter despite benchmark indices broadly moving higher. The explanation is straightforward and it comes down to two things: which geographies and indices our book was sold into and against, and a set of non-recurring operational headwinds. On the index side, although the PLV headline number rose 17% in Q1, the relevant benchmarks for the majority of our export tonnage fell 6% quarter-over-quarter.
These were sales against the U.S. high-vol indices, which today are 35% lower than the PLV index.
And remain heavily deviated from their historical relativities to PLV. Another 25% of our Q1 sales were domestic shipments of high-vol-B coal, with pricing, of course, down year-over-year about 8.5%. Furthermore, 55% of our Q1 exports went to Asia, which is the highest proportion in company history. Unfortunately, PLV-linked business represented only about 15% of our overall Q1 volumes because a large PLV-linked shipment representing another 6% of overall Q1 volume slipped into early Q2 due to weather-related logistics backlogs. Increased shipments against PLV-linked contracts should benefit export realizations versus Q1. On the operational side, severe weather disruptions to both CSX and Norfolk Southern rail networks in January and February impacted our ability to make timely planned coal deliveries, particularly some higher-priced domestic specialty orders which slipped into Q2.
Also for Q2, we expect increased overall shipment volumes with our Great Lakes business now fully flowing and the normalization of the rail and weather-related disruptions that impacted Q1 execution.
On pricing for Q2, we expect to move 70% to 75% of committed volumes to the seaborne market, with about 25% of export tons priced off the PLV index, another 25% on a fixed pricing basis, and the remaining seaborne volumes roughly evenly split and priced against the U.S. low-vol and the U.S. high-vol indices respectively.
Turning to our overall 2026 sales position, we have now secured commitments for a total of 3.5 million tons which represents about 90% of our planned annual production at the midpoint. Domestic customers account for 1.1 million tons at an average fixed price of $138 per ton. Export commitments totaled 2.4 million tons, comprised of 1 million tons at an average fixed price of $107 per ton and 1.4 million tons on index-linked pricing mechanisms. As of the end of Q1, we had shipped 650 thousand tons of our annual index-based business and had about 1.75 million tons remaining to price.
As we look ahead to 2026, we are optimistic about an improved market environment for met coal. On the demand side, protectionist policies in the U.S. and Europe have lifted steel prices and increased hot metal output. India's 2026 crude steel production is projected to increase 8% to 9% year-over-year. Furthermore, in one of the most constructive developments for seaborne coking coal demand in some time, China's steel exports have fallen nearly 10% through April on a year-over-year basis. If that moderation proves durable, it will lend considerable support to global steel prices and blast furnace mill margins. On the supply side, we expect high-vol coking coal production to continue to contract throughout the year which should narrow the widest spread between U.S. high-vol indices and Australian indices. Randy and Jeremy have already pointed to a number of Appalachian and Australian producers who have either gone into bankruptcy, curtailed production, or placed assets for sale. As the year plays out, this expected supply contraction will have an impact. Specifically regarding Australia, we believe current PLV levels are not only sustainable, but have further upside as the year goes on. This is set against the backdrop of limited capital investment, high royalty taxes, and continued production issues and interruptions, alongside strengthening global steel markets. Moving to our Brook Mine, we continue to advance the critical minerals marketing program with increasing momentum. Our expanded marketing team is actively engaging potential customers and partners in the U.S. and overseas across the full Brook Mine product portfolio. We hope to announce various counterparty MOU transactions this coming quarter. As we generate additional lab-scale and pilot-scale material in 2027, we expect these MOU frameworks to evolve toward formal commercial agreements. And with that, I will turn it back over to the operator for the Q&A portion of the call. Operator?
分析師問答
We will now begin the question and answer session. Our first question comes from Brian Lee of Goldman Sachs. Go ahead please.
Hey guys, this is Tyler Bisson on for Brian. Thanks for taking our questions. Appreciate all the color on the impact from the higher cost on the coal side. As you think out for the rest of the year, presumably you are bringing back online some operations. How do you think about your cost trends in the back half of the year? Can you just kind of walk us through some of the puts and takes there?
Christopher, why don't you handle that? But Brian, I mean, I think effectively what we are bringing back online at the Berwind mine is not necessarily what I would describe as a high-cost operation. It is actually one of our better cost products. Christopher, do you want to go into a little bit more granularity?
Yes. So obviously last year we did idle the Laurel Fork mine, which is the one that we have restarted in April. But it is only being restarted until the ventilation work I was describing is completed at the Berwind mine. We are using it as a staging ground to hire the workforce that will then be transferred over to Berwind so that we do not experience the same ramp-up in production and hiring at Berwind that we normally would if we waited till September to start that section. So we would have that normal incremental while you have got the lower production ramp-up at Berwind. We are just choosing to take that in advance. And it is a relatively small amount of tons that Laurel Fork will produce over April through August. So do not view that as impacting the cost more than probably $1 overall on the low-vol side of the business. Then ultimately, when Berwind starts, that mine has historically been one of our lowest-cost producers in the portfolio.
Awesome. Super helpful. And then on the sales commitments, I know these represent about 90% of your production at the midpoint of guidance, but it's just 80% of the midpoint of your sales guidance. I guess what gives you confidence that you can book these incremental volumes to meet your sales guidance for the year? What are some of the puts and takes here through the balance of the year?
Sure. Jason, you want to take that?
Yes, sure. Tyler, this is Jason. Certainly, we are seeing demand start to pick up already here. I think a lot of that is on the back of the various geographies' steel markets improving. We have seen some incremental demand there. We are quite confident in what we are seeing not coming out of China as far as demand we are starting to see into the Pacific. Particularly, we talked about the Maben loadout firing up. We have actually got our first cargo of Maben going seaborne this quarter into the Pacific against PLB. So I think on both the high-vol and the low-vol sides, again, we are being prudent with the high-vol. We are seeing demand start to pick up; we just have to be smart about the pricing.
Thanks, Brian. The next question comes from Jeffrey Grampp of Northland Capital Markets. Go ahead please.
Good morning, all. Thanks for the time. I was curious as it relates to potential offtake agreements or MOUs at Brook Mine. I mean, you guys can't get into too much today, but curious if there is any particular product that is gaining more interest versus others, any that are more actionable in the near term? Thanks.
Yes. Of course, as I said earlier, I do not want to tempt fate and get into too much specifics. But I would say that the products in general that a number of our potential customers are focused on are gallium and scandium. We were actually relatively pleased by the interest that we have gotten on scandium since that has been a subject of some criticism of our portfolio in the past.
Got it. Appreciate that. And for my follow-up, given the strong balance sheet that you guys have here, I am wondering your thoughts on M&A, maybe even bifurcating that in terms of potential on the met coal side, given some of the near-term distress? And then is there anything on the critical minerals side that might be interesting?
Sure. As I have kind of quipped before on M&A, we are not too fond of the 'M', but we are happy to look at the 'A.' We opportunistically, as part of frankly our DNA, have done acquisitions particularly of reserves that we felt were able to be opportunistically acquired. We bought a large portfolio from Coronado several months ago. We have done other purchases of similar note over the years. I think it is becoming a more target-rich environment, if you will call it that, and we are certainly out there looking. Again, if we see anything that seems to make sense, we will pull the trigger, assuming we can get it at an opportunistic price. The market conditions today would seem to dictate that there may be a few things that you could pick up on an advantaged basis.
Thank you. The next question comes from Soundarya Iyer of Baird. Go ahead please.
Hey, good morning. Thanks very much for the time and for taking our questions. Two for first: earlier this year you talked a bit about some backlogs at the national labs and some of the other third-party testing sites. Just wondered if these have improved, have stayed the same, or any other thoughts you could provide on outlook for this for the balance of the year? And then I have one follow-up.
Sure. I am going to let Mike go into granular detail, but one rather important thing is we are now starting to onboard testing at our own facilities out at our research facility in Wyoming. So I am hopeful that as we get more space out there, we will then be able to do a lot of the initial testing work ourselves in Wyoming. Once we get the pilot facility up and at them, we will be doing a great deal of testing. As far as third-party groups, Mike, why don't you comment on that?
Yeah. Look, it has still persisted as a challenge. I think there is a lot of activity happening in critical minerals domestically and the labs are full. We identified this a couple of quarters ago and therefore fitted out our own labs. We expect to be doing our own testing and I think that will alleviate some of the challenges that the entire industry is facing with regards to lab capacity.
Super helpful. And thank you both for that. Maybe my second one, and again fully acknowledge that more details are later to come this year. But maybe for you Randy, just wondering if you could talk a bit more about the strategy or the rationale to break things down in reorganization the way that you did? Why by assets versus by products? Any other thoughts on this methodology would be helpful. Thank you very much.
Sure. You bet. As we started down this process of really having a dual platform with two different businesses, the rare earths and adjacent critical minerals obviously are viewed in an entirely different light than the coal business. If you go back and look at publicly traded companies in the rare earth space, they trade at a different multiple than coal companies. Ultimately, it would make sense to be able to unlock the value that we have in our various assets so that they could be separately valued in the marketplace as opposed to being in a conglomerate structure. Conglomerates can be complicated for analysts to follow because they are completely different businesses in many cases, even though our businesses are somewhat mining-related. Certainly, the processing aspects of the rare earth business are completely different than anything associated with the coal industry. The other thing which is pretty unique, of course, is we, unlike a lot of other companies, have a substantial amount of reserve assets both in the coal as well as in the rare earth space. We have a huge reserve base out in Wyoming, and there are frankly not very many entities out there that will be able to show an income stream coming from unique assets like coal and rare earth combined. So at some point, we expect to be able to drop down many of the infrastructure assets that we have in both the East and the West into this platform, and that could be a very compelling royalty play. The refinery business is a very different business — it trades at different multiples and is more of a commoditized business. From a CapEx standpoint, that will be the highest-ticket of all of our development efforts. We will not have the numbers nailed down until we publish something independently from Hatch later next month, but you can assume that a rare earth processing facility is a high-ticket capital expenditure. The mining and sales aspects that we will do out west will again be very similar in concept and conduct to what we do out east. We will have an interesting blend of different entities. We do not have any specific plans at this point other than getting everything set up and put into separate categories and separate entities. That provides us optionality to decide later on what is the most advantaged way to value these assets for our shareholders, because I think we have a number of different assets that could provide compelling value as we move forward.
The next question comes from Carlos De Alba of Morgan Stanley. Go ahead please.
Yes, thank you very much. Good morning everyone. I just wanted to drill down a little bit more on the rationale to separate in the restructuring that you are doing and to separate the Ramaco Refining business for the Brook Mine critical mineral feedstocks and the Ramaco Critical Minerals. Given that presumably they are fairly integrated operations?
Great question, Carlos. The refining aspect of critical minerals is an entirely different breed of activity than the mining and sales aspect. Including and wrapping the refining together with the mining and sales conceivably mixes two different types of operations which could trade at different multiples if they were freestanding. Providing a platform for rare earth sales and mining will be one platform that is pretty clean and understandable. Segregating the refining business into a separate entity provides us different ways to look at financing and operating it. It gives us options that we are now seriously pursuing on a number of different fronts, which I cannot really get into today. We will wait for further details down the road.
And then maybe another one relating to the thermal coal byproduct within the Brook Mine. This is a very important byproduct that will help the economics of the project. Can you give us any update on customer discussions and offtakes or MOUs for that thermal coal volume?
Yes. We are discussing right now with a number of utility groups potential offtakes. We are even exploring longer-term some possible avenues for being able to make on-site use of the thermal coal in some manner, which I will not get into right now, but that could be interesting. As it relates to actual mining, we do not want to engage in full-scale mining right now even though we would presumably be able to move a thermal product, because we do not want large stockpiles of critical mineral feedstock that we will not be able to effectively process until we have a commercial facility. We are setting ourselves up to be able to have the thermal coal moved in sequence and in sync with our critical mineral processing and mining operations. As you point out, the byproduct is coal, and we are able to sell that at economics that, even based on current thermal prices, would in essence help pay for a substantial portion of the mining costs for all products inclusive of the critical minerals.
The next question comes from Nathan Martin of The Benchmark Company. Go ahead please.
Thanks, operator. Good morning, everyone. Really just a clarification question to start. You guys previously called the expected report from Hatch a preliminary economic analysis. Now you are referring to it as a revised conceptual study. Any anticipated change in the data we should expect from the report?
Short and long answer is that you can expect no change in the data that will be developed in the report. It will have the same sort of commercial and technical feasibility that was developed when the Fluor report was put out last year under the solvent extraction technique. The change in nomenclature is candidly from a compliance standpoint to be consistent with SEC guidance on how these studies should be described, using the term 'conceptual study' rather than the prior nomenclature.
Okay. Got it, Randy. Appreciate that. Maybe Jason, question for you. You gave a lot of good detail on expected sales for the rest of the year. I might have missed this, but you mentioned lower net pack realizations on export sales into Asia in the first quarter caused by elevated freight rates. What portion of your remaining sales do you expect to be sold on a CFR basis and could freight rates possibly impact trade rates if they remain higher?
Nate, this is Jason. We actually typically sell very little on a CFR basis. Where we saw the impact going into the Pacific was on recognized freight there versus the Australian shipments. We had several pricing mechanisms in Q1 set up in advance of the Iran conflict, and once we started to see the impacts of that, it was baked into the overall mechanisms. That is where we saw the hit. Given the fact that we had a large shipment slip at the very end of the quarter, that also impacted us. Typically, Q1 is usually our lower domestic sales in terms of total volume out the door, so all those things kind of came together and caused that impact on pricing.
Okay. And then you mentioned domestic — I did see your domestic tonnage remained at 1.1 million tons but I think pricing was down about $4 versus last quarter. Anything specific you could talk about that drove that change? And do you expect any additional domestic sales thus far with a little bit of open tonnage still out there?
Yes. On the pricing change, nothing's changed in terms of customers or structures. We are marking certain fees differently than we had before to get better apples-to-apples pricing comparisons within our book, and that accounts for the change on the domestic side. On the pickup in domestics, we have seen a couple points of interest. On the high-vol side, given operations that have either already shut down or are curtailing or in the process of shutting down, we view that as a positive sign. Elk Creek has an excellent reputation in the domestic market and we typically get one of the first calls when folks need tonnage, and we are seeing that already. So we see that as very positive certainly for the second half.
Thank you. Our next question comes from B. Riley Securities. Go ahead please.
This is actually Nick on from B. Riley. First question: can you provide a breakdown of CapEx, or break out the met coal CapEx between sustaining and growth? And on the growth side, what is baked in today and what other levers do you have to ultimately increase low-vol exposure and what does that capital intensity look like?
I will take that. When we think of our CapEx guidance for the year, it is pretty close to $50 million in maintenance on the coal front and then growth on both the coal and the rare earth and critical minerals front. I would use about $10 to $11 a ton on the coal side, so call it about $45 million of maintenance capital and then another $20 million or so for our low-vol growth this year, which is obviously the third section at Berwind and then the rail loadout at Maben, with the remaining for rare earths. On the growth side, our focus on the coal front is really on the low-vol side. That is ultimately taking the Berwind mine up to four sections. Should we choose to go that route, we can go underground at the Maben Complex which would add up to another 1.5 million tons. All of this is market dependent. We are starting to see some positive signs ahead and as we move throughout the year and start budgeting for 2027, these are things we will take a hard look at.
And I will add that we have one of our Maben shipments going seaborne this quarter, which we think is important because to the extent we can establish the Maben brand overseas that will be an important market for larger volumes of low-vol than we have historically experienced. We are certainly in a liquidity position to initiate the Maben deep expansion as soon as we think we have sufficient clarity on market signals that give us comfort that once we put it in, there will be a strong market for full commercial production.
Got it. Thanks for that. Maybe one more clarifying one. I think I heard 15% was PLV-linked of met shipments this quarter. Could that go in Q2 and where should we expect that to settle when Berwind ramps up later this year?
Yes, Nick, this is Jason. In Q2, right now we are projecting on the basis that is committed about 25% of exports based on PLV, which is maybe just slightly over 20% of overall volumes. There are still a few tons to place in Q2 which we will look to the market for. In the back half, a few things: we inked a term high-vol deal very late in Q1 that just started and will flow through the entire year, so we will see more impact in Q2 and in the back half. Randy and I both mentioned the Maben trial this quarter and we are hopeful that leads to more business on that front. We are also currently in negotiations with one large firm customer on LV-link business to add additional cargoes in the second half. So based on where we sit today, we would expect PLV exposure to increase, but it's hard to put a precise number on it now.
Got it. One more: when we think about the carbochlorination process and IP, as you build IP around this, is the patent protection ultimately around the chemistry or the application to coal-hosted material? What would you ultimately protect against given some peers exploring processing as well?
I will let Mike go into some more detail, but suffice to say that our IP protections are intended to be broad and encompassing. They would include the areas you articulated and anything we can regard as trade secrets. If we get this perfected, it would be a pretty good mousetrap. We believe there will be interesting things to download into our Ramaco Royalty entity, including potential IP income that could be impactful over time.
As it relates to specifics on the processes themselves, yes, the IP touches on a couple of things. Rare earths and critical minerals in coal and carbonaceous clays — definitely we want to lock this technology up. The IP is also around the extraction and around some of those critical minerals. The beauty of this deposit is we are not purchasing a reagent; we have it there and it is mineralized. If you had to purchase coal or carbon for the reaction, that would add cost. We are producing it at a fraction of that cost and we are generating a significant amount of our critical minerals from the coal itself, and that is what the IP is around.
Got it. Thanks for that, Mike. That is more clear. I appreciate it.
This concludes our question and answer session. I would like to turn the conference back over to Randall W. Atkins, Chairman and CEO, for any closing remarks.
Sure. Well, first of all, I want to thank everyone for joining us today. As we commented earlier, we expect by the end of next month — possibly slipping into July — to receive reports from both Hatch and Weir, which we regard as a pretty significant milestone. At that point, we are considering coming back into the market to have a separate call which will be both disclosed in written form and we will likely hold a separate call to entertain questions from analysts and shareholders. We expect that to happen sometime probably in July, which would be before our Q2 earnings call that we expect to happen in early August. With that, I thank everybody again for being on the call today and we will look forward to our next catch-up. Thank you very much.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.