After new exploratory drilling at the Berwind mine, Ramaco Resources has further defined the extent of a sandstone intrusion and has implemented an alternative plan to mine around it and ramp up into the Pocahontas No. 4 seam. The company said it will continue to mine in an alternate path through the Pocahontas No. 3 Seam at an expected annualized rate of about 200,000 tons per year (tpy). These development tons are expected to be sold at current pricing levels into the low volatile metallurgical market.
Ramaco Resources now estimates that it will reach the thicker Pocahontas No. 4 seam low-volatile reserve in the second quarter of 2020, as opposed to the third quarter of 2019. When reached, the level of production anticipated from both the Pocahontas Nos. 3 and 4 reserves remains as originally forecast at approximately 800,000 tpy.
The Berwind coal reserve consists of 31,200 acres of controlled mineral and approximately 72 million clean recoverable tons of proven and probable reserves located on the border of West Virginia and Virginia, in McDowell County, West Virginia, and Buchanan and Tazewell counties, Virginia.
Ramaco Resources has new commitments for the sale and delivery of more than 1.2 million tons of various qualities of metallurgical coal to domestic customers in 2019. The average price of these sales is approximately $113/ton FOB mine, which compares to the company’s 2018 average sales price to domestic customers of $79/ton FOB mine, an increase of roughly 43% year over year. The company also contracted earlier this year with various export customers for the sale of an additional 200,000 tons of metallurgical coal for delivery in the first half of 2019, at prices set against various index prices.