Ramelius Resources Limited ((AU:RMS)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Ramelius Resources Limited painted a picture of robust financial health and operational excellence. The company achieved record free cash flow and a significant uptick in gold production, contributing to an overall positive sentiment. Despite some challenges, such as the first lost-time injury (LTI) since May 2023 and higher costs at Edna May, the company’s substantial achievements in production and cost management were the highlights of the call.
Record Free Cash Flow
The December quarter saw Ramelius Resources achieve a record AUD 174.5 million in underlying free cash flow, setting a benchmark in the sector. This impressive performance underscores the company’s ability to generate significant liquidity and financial stability.
Significant Increase in Gold Production
Gold production for the quarter reached 85,311 ounces, marking a 37% increase from the previous quarter. This rise was largely due to the introduction of ore from Cue and improved grades from Penny, showcasing the company’s effective operational strategies.
Decrease in All-In Sustaining Costs
Ramelius Resources reported a 25% decrease in all-in sustaining costs, bringing the cost down to AUD 1,491 per ounce. This reduction was primarily driven by the performance of the Cue operations, highlighting efficient cost management.
Strong Financial Position
With a cash and gold position exceeding AUD 500 million and over AUD 1 billion in available liquidity, including a AUD 175 million debt facility, Ramelius Resources is well-positioned financially. This strong liquidity provides the company with a solid foundation for future growth.
High-Grade Ore Processing
The average mine grade for the quarter was 7.3 grams per tonne, more than doubling from the previous quarter. This improvement was driven by higher grades at Cue and Penny, reflecting the company’s focus on high-quality ore processing.
Positive Cash Flow from Key Operations
Key operations like Mt Magnet and Penny reported substantial cash flows of AUD 161.3 million and AUD 73.1 million respectively. Notably, Penny achieved this with an all-in sustaining cost of just AUD 790 per ounce, indicating high operational efficiency.
High Margin on Gold Sales
Ramelius Resources realized a gold price of AUD 3,383 per ounce during the quarter, resulting in an impressive all-in sustaining cost margin of 60%. This high margin underscores the company’s effective management and strong market positioning.
First Lost Time Injury Since May 2023
The quarter recorded its first LTI since May 2023. While the incident was not severe, it marks an area for improvement in the company’s otherwise strong safety record.
Edna May Cost Challenges
The Edna May operation faced challenges with higher costs, reporting an all-in sustaining cost of AUD 2,209 per ounce. This indicates room for improvement in cost management at this site.
Forward-Looking Guidance
Looking ahead, Ramelius Resources maintains its guidance for FY ’25 with gold production expectations of 270,000 to 300,000 ounces at an all-in sustaining cost of AUD 1,500 to AUD 1,700 per ounce. The company plans to continue focusing on safety and advancing project development, with key studies and updates anticipated in the coming quarters.
In summary, the earnings call for Ramelius Resources Limited highlighted a period of strong operational and financial performance. Despite some challenges, the company demonstrated significant achievements in cash flow generation, production increases, and cost reductions, setting a positive tone for future growth.
