LEXINGTON, Ky., Feb. 16, 2021 /PRNewswire/ -- Ramaco Resources, Inc. (NASDAQ: METC) ("Ramaco Resources" or the "Company") today announced that its Board of Directors approved expenditure for opening two new mines. They are expected at full production to add almost one million new tons per year of additional low vol and mid-vol production, with initial production beginning in 2021. Together they will increase Ramaco's overall capacity by roughly 50%, to approximately 3 million tons of annual low-cost production.
Randall Atkins, Ramaco Resources' Chairman and Chief Executive Officer remarked, "Today, the Board approved the completion of the current Berwind slope which had been halted last year, as well as starting a new surface mine at the Knox Creek complex called the Big Creek mine. We look forward to resuming Ramaco's originally projected growth trajectory to over 4 million tons in this current strong market and plan to spend approximately $18 million on these properties over the next two years. Once in production, these mines will have a material positive impact on our future earning capacity, especially in 2022 and beyond. They will also provide additional near-term tonnage in 2021 to sell into these strengthening markets. Our financing plan for this growth is through a combination of working capital, equipment debt, and free cash flow."
Atkins continued, "The Berwind slope is the larger of the two projects. We view Berwind as the second flagship complex for Ramaco. We are excited not just about the economics, and the fact that this will make us a presence in the low vol markets, but also about the long-term job creation that this operation will bring to West Virginia and southwest Virginia. We have already spent over $50 million in capital over the past four years to get Berwind where it is today. We anticipate spending another $10-12 million in development capital over the next 12 months, with about a third of that outlay spilling over into the early part of 2022. At full production, Berwind will produce approximately 750,000 tons a year of high quality low volatile coal, with cash costs in the low to mid $70s per ton range. We expect initial production later this year which will ramp up to full production levels by the second quarter of 2022. We anticipate being able to produce at these levels in this reserve for more than 20 years."
Atkins commented, "The new Big Creek project is a surface mine near our Knox Creek prep plant, where we can ramp up to initial production within roughly four to six months of breaking ground. In total, we expect to spend roughly $5-7 million in growth capital at this mine over the next two quarters. We anticipate full production of around 150,000-200,000 tons a year by the fourth quarter of 2021. Big Creek will be primarily high quality mid-vol coal, with cash costs in the upper $50s per ton range. We expect to be able to produce at these levels for more than 3 years."
As previously disclosed, the Company will report fourth quarter 2020 financial results on Thursday, February 18, 2021 after the close of the market. The earnings news release will be available on the Company's investor relations website at www.ramacoresources.com and through major financial information sites. At 9 a.m. Eastern Time on Friday, February 19, 2021, Ramaco Resources will host an investor conference call and webcast where Randall W. Atkins, Chairman and Chief Executive Officer, Christopher L. Blanchard, Chief Operating Officer and Jeremy R. Sussman, Chief Financial Officer will discuss the fourth quarter 2020 results, as well as today's announcement.
About Ramaco Resources, Inc. Ramaco Resources, Inc. is an operator and developer of 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. The Company has five active mines operating from two mining complexes at this time.
News and additional information about Ramaco Resources, including filings with the Securities and Exchange Commission, are available at www.ramacoresources.com.
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, 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 impact of the COVID-19 global pandemic, unexpected delays in our current mine development activities, failure of our sales commitment counterparties to perform, increased government regulation of coal in the United States or internationally, or further decline of demand for coal in export markets and underperformance of the railroads. 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.