Ramelius Resources Limited ((AU:RMS)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Ramelius Resources Limited’s recent earnings call painted a picture of robust operational and financial health, underscored by record-breaking production figures and cash flow. The company celebrated its successful merger with Spartan Resources and committed to significant exploration investments. However, challenges such as safety incidents and the transition of Edna May to care and maintenance were also acknowledged, alongside the deferral of full-year guidance for FY ’26.
Record Gold Production
Ramelius Resources achieved a milestone in gold production, surpassing 301,000 ounces for FY ’25. This record output was achieved at a competitive all-in sustaining cost of AUD 1,551 per ounce, showcasing the company’s efficiency and operational prowess.
Strong Financial Performance
The financial metrics for Ramelius were equally impressive, with the company generating a record operating cash flow of $771 million and an underlying free cash flow nearing $700 million. The fiscal year closed with a robust cash and gold balance of $809.7 million, reflecting the company’s strong financial footing.
Successful Integration with Spartan Resources
The integration with Spartan Resources has been described as seamless, promising to bolster Ramelius’s exploration capabilities and financial strength. This strategic move is expected to enhance the company’s long-term growth prospects.
Exploration Investment
Looking ahead, Ramelius plans to significantly increase its exploration budget, with an investment of $80 million to $100 million planned for FY ’26. This represents a doubling of the previous year’s expenditure, aimed at unlocking new high-grade opportunities.
Low Production Costs
The company reported an all-in sustaining cost of $1,339 per ounce for the quarter, with the Mt Magnet site standing out as one of Australia’s most cost-effective production centers at $1,310 per ounce.
Safety Incidents
Despite the positive financial and operational results, safety remains a concern. The June quarter recorded one Lost Time Injury and four Restricted Work Injuries, marking a setback in the company’s safety performance.
Edna May Transition to Care and Maintenance
The Edna May site produced a mere 1,000 ounces at a high cost of $2,892 per ounce, leading to its transition into care and maintenance. This strategic decision reflects the company’s focus on optimizing resource allocation.
Deferred Full Year Guidance for FY ’26
Due to the timing of the Spartan Resources transaction and ongoing integration efforts, Ramelius has deferred its full-year production and cost guidance for FY ’26. The company plans to provide extended guidance by December 2025, with a long-term production target of 500,000 ounces per annum by FY ’30.
Forward-Looking Guidance
CEO Mark Zeptner emphasized the company’s strong performance with record production and low costs. The exploration budget for FY ’26 is set to capitalize on high-grade opportunities, particularly at the Mt Magnet hub. While FY ’26 guidance is deferred, the integration of Spartan Resources is expected to enhance processing capabilities, aiming for a production target of 500,000 ounces per annum by FY ’30.
In conclusion, Ramelius Resources’ earnings call highlighted a period of strong performance and strategic growth initiatives, tempered by challenges in safety and operational transitions. The company’s commitment to exploration and seamless integration with Spartan Resources positions it well for future success, despite the temporary deferral of full-year guidance.