8-K: Ramaco Boosts Credit Facility to $500M, Extends Term

Ramaco Resources, Inc. secured a Third Amended and Restated Credit and Security Agreement, increasing its revolving credit facility to $500 million and extending its maturity to December 30, 2030.

Summary

• Ramaco Resources, Inc. (the Company) entered into a Third Amended and Restated Credit and Security Agreement on December 30, 2025, with KeyBank National Association and other lenders.
• The new Credit Facility provides an initial aggregate revolving commitment of $350,000,000, with an incremental accordion feature of $150,000,000, bringing the total potential commitment to $500,000,000.
• This facility replaces the existing Second Amended and Restated Credit and Security Agreement, which had commitments of $200,000,000 and a $75,000,000 accordion feature.
• The maturity date of the Credit Facility has been extended from 2029 to December 30, 2030.
• Borrowings under the facility are limited to the lesser of the aggregate revolving commitments and the borrowing base.
• Interest rates are set at the secured overnight financing rate (SOFR) plus an applicable margin of 2.50% per annum, or the base rate plus an applicable margin of 2.00% per annum.
• An unused commitment fee of 0.375% per annum will be paid on the unused portion of the commitments.
• The obligations are secured by a first-priority security interest in substantially all of the Company's personal property, excluding owned or leased real property, improvements, fixtures, machinery, and equipment.
• The agreement includes customary affirmative, negative, and financial covenants, such as maintaining a fixed charge coverage ratio of not less than 1.10:1.00 during periods of low excess availability (less than 12.5% of the maximum borrowing amount).
• The Company issued a press release announcing the execution of the Third A&R Credit Agreement, highlighting it as an important milestone for long-term growth objectives.

Sentiment

Score: 8

Explanation: The sentiment is highly positive due to the significant increase in credit capacity, extended maturity, and the explicit support for strategic growth initiatives, including the Brook Mine development and shareholder returns. This provides enhanced financial stability and flexibility.

Positives

• Increased overall credit capacity from $275,000,000 (including accordion) to $500,000,000, providing significant financial flexibility.
• Extended maturity date from 2029 to December 30, 2030, offering longer-term financing stability.
• Enhances the Company's ability to pursue disciplined growth in its metallurgical coal business, return capital to shareholders, and advance its Brook Mine critical mineral and rare earth development.
• Strengthened partnerships with a syndicate of banking partners, including KeyBank, Truist, Associated Bank, Old National Bank, Morgan Stanley, Goldman Sachs, Texas Capital, STAR Financial, and Trustmark.

Negatives

• The facility is secured by a first-priority security interest in substantially all of the Company's personal property, which could limit future financing options or asset sales.
• Certain inventory from the Brook Mine (Clean Coal and Clean Coal Equivalents) is explicitly excluded from being Eligible Coal Inventory for borrowing base calculations.
• Eligible Refined Rare Earth Element Inventory is capped at $75,000,000 and cannot exceed 30% of the aggregate Borrowing Base, potentially limiting borrowing capacity from this segment.

Risks

• Failure to maintain a Fixed Charge Coverage Ratio of not less than 1.10:1.00 during periods when excess availability is less than 12.5% of the maximum borrowing amount could trigger an event of default.
• The occurrence of any event of default, including payment defaults, breaches of covenants, misrepresentations, cross-default, bankruptcy, or change of control, could lead to acceleration of obligations and exercise of remedies by the Agent.
• Limitations on the eligibility of certain inventory (e.g., Brook Mine coal, caps on refined rare earth elements) for the borrowing base could restrict liquidity.
• The Company's ability to meet its obligations under the credit facility is subject to various factors, including market conditions for metallurgical coal and the successful development of the Brook Mine critical mineral and rare earth project.
• Changes in interest rates (SOFR or Base Rate) could increase the cost of borrowings under the facility.

Future Outlook

The Company anticipates using the enhanced financial flexibility from the new credit facility to support disciplined growth in its metallurgical coal business, facilitate the return of capital to shareholders, and advance the development of its Brook Mine critical mineral and rare earth project. This financing is part of a broader strategy that has seen almost $1 billion in capital market and banking transactions since August 2025.

Management Comments

• Randall Atkins, Ramaco's Chairman and Chief Executive Officer, stated: 'We appreciate our strengthened partnership with KeyBank and value the key players in our expanded syndicate.'
• Randall Atkins also noted: 'The new Facility increases our overall credit capacity to $500 million and extends the term to 2030, providing us with significant financial flexibility.'
• Randall Atkins further commented: 'This solid foundation enables us to continue disciplined growth in our metallurgical coal business, return capital to shareholders, and to advance our Brook Mine critical mineral and rare earth development. We believe the amended credit facility enhances our ability to create long-term value for our investors.'

Industry Context

This financing event positions Ramaco Resources to continue its operations and strategic initiatives in the metallurgical coal and critical mineral sectors. The increased credit capacity and extended term provide a more stable financial foundation, which is crucial for capital-intensive industries like mining and mineral development, especially as the company pursues the development of its Brook Mine rare earth and critical mineral project, a new and potentially high-growth area.

Comparison to Industry Standards

• The terms of the asset-based revolving credit facility, including interest rates (SOFR + 2.50% or Base Rate + 2.00%) and an unused commitment fee (0.375%), are customary for similar facilities in the mining and natural resources sector.
• The syndicate of lenders, including major financial institutions like KeyBank, Truist, Morgan Stanley, and Goldman Sachs, indicates a robust and diversified banking relationship, typical for publicly traded companies of Ramaco's size and operational scope.
• The inclusion of an accordion feature is standard practice, allowing for future expansion of the facility as business needs grow, without requiring a completely new agreement.
• The fixed charge coverage ratio covenant (1.10:1.00) is a common financial metric used in credit agreements to ensure debt service capacity, aligning with industry benchmarks for financial health.

Related Party Transactions

• The agreement outlines conditions under which transactions with Strategic Critical Minerals Terminal, Inc. (SCMT), an excluded subsidiary, are permitted, such as arms-length sales of Processed Rare Earth Elements and commercial agreements for real property use, provided no commingling of assets occurs and no mining rights are transferred.

Stakeholder Impact

• Shareholders: Potential for increased shareholder returns and long-term value creation through strategic growth and capital allocation.
• Employees: Continued operations and growth in metallurgical coal and rare earth development could ensure job stability and potential expansion.
• Customers: Enhanced financial stability may support consistent supply and operational reliability.
• Lenders: The new agreement provides a secured position with first-priority liens on personal property, ensuring protection for their investment.
• Suppliers/Creditors: Improved financial health and liquidity could lead to more reliable payments and stronger business relationships.

Next Steps

• Continue disciplined growth in the metallurgical coal business.
• Return capital to shareholders.
• Advance the Brook Mine critical mineral and rare earth development.
• An initial appraisal of Processed Rare Earth Elements will be commenced within ninety (90) days of the Closing Date to determine eligibility for the Borrowing Base.

Key Dates

Recommendation

The significant increase in the revolving credit facility to $500 million and the extension of its maturity to 2030 provide Ramaco Resources with substantial financial flexibility and stability. This enhanced liquidity directly supports the Company's strategic objectives, including disciplined growth in its core metallurgical coal business, potential capital returns to shareholders, and the advancement of the high-potential Brook Mine critical mineral and rare earth project. The positive framing by management and the successful syndication with multiple banking partners underscore confidence in the Company's future. For a seasoned investor, this move de-risks future funding needs and enables strategic execution, making the stock a compelling 'buy' for long-term growth.

Keywords

Ramaco Resources, credit facility, revolving credit, debt financing, metallurgical coal, rare earth minerals, Brook Mine, corporate finance, SEC filing, 8-K, KeyBank, corporate debt