Ramaco $345 million convertible notes offering and capped call transactions

Davis Polk advised the representatives of the several underwriters in connection with an SEC-registered offering of an aggregate principal amount of $345 million of 0% convertible senior notes due 2031 of Ramaco Resources, Inc., which included $45 million aggregate principal amount that the underwriters purchased pursuant to their over-allotment option to purchase additional notes and an SEC-registered concurrent delta offering relating to the offer and short sale of 2,245,126 shares of its Class A common stock. In addition, Davis Polk advised the counterparties to the capped call transactions entered into in connection with the notes offering.

The proceeds from the notes offering will be used to fund the cost of entering into the capped call transactions with the remainder being used to fund the development of Ramaco’s rare earth elements and critical minerals project, for strategic growth opportunities and for general corporate purposes.

Ramaco Resources is an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia and southwestern Virginia and a developing producer of coal, rare earth elements and critical minerals in Wyoming. Its executive offices are in Lexington, Kentucky, with operational offices in Charleston, West Virginia and Sheridan, Wyoming. The company has four active metallurgical coal mining complexes in Central Appalachia and one development rare earth element and coal mine near Sheridan, Wyoming in the initial stages of production. In 2023, the company announced that a major deposit of primary magnetic rare earth elements and critical minerals was discovered at our mine near Sheridan, Wyoming. Contiguous to the Wyoming mine, the company operates a carbon research facility and is developing both a rare earth element and critical mineral pilot processing facility expected to be followed with a full-scale commercial oxide processing facility.

The Davis Polk capital markets team included partner Stephen A. Byeff, associates Xi (Brooke) Zheng and Ryeaan Anwar Chaudhary. The equity derivatives team included partner Mark M. Mendez, counsel Katharine O’Banion and Joseph Luizzi, associates Richard Stockton Bullitt, Danielle Forni and Melissa X. Estrada. Partner Aliza Slansky provided tax advice. All members of the Davis Polk team are based in the New York office.