Ramelius Resources’ rapid growth plans are well on target after the company achieved a financial year production record of 293,033 ounces.
The financial year 2024 results are at the upper end of the upgraded guidance of 285,000-295,000oz and well above the original guidance of 250,000-275,000oz published in July 2023.
The company told shareholders that the outstanding results are expected to lead to its full-year all-in sustaining costs being at the lower end of the upgraded guidance range of between A$1,550/oz and A$1,650/oz.
Cash flow positive
The significant production performance helped Ramelius create underlying free cash flow of $137.3 million.
It also helped fund an initial $87.7m strategic investment in Spartan Resources and pay $10.1m for stamp duty on its Musgrave acquisition.
Ramelius subsequently made a second purchase of Spartan shares amounting to $92m, taking its stake in the up-and-coming gold explorer to 17.9%.
The performance saw the company generate a cash and gold balance of $446.6m as at 30 June – up from $407.1m in the previous quarter.
New debt facility
Earlier this month, Ramelius entered into a new $175m revolving debt facility to help fund its growth plans, upsizing the previous $100m facility.
The syndicated facility agreement (SFA) with a number of major financial institutions provides Ramelius with a revolving corporate facility for a four-year term with the option to extend by a further year.
“While Ramelius has a strong balance sheet and we generate significant operating cash flow, we feel it is important to have the added financial flexibility which this low-cost revolving debt facility provides us,” managing director Mark Zeptner said.
Continual evaluation
Speaking on the June acquisition of the initial interest in Spartan, Mr Zeptner said Ramelius continually evaluates gold assets in Western Australia.
“Ramelius has an enviable portfolio with multi-stage operations and a development project that is underpinned by the long-life, low-cost Mt Magnet operation,” he said.
“We also have extensive greenfield exploration opportunities and our investment into Spartan Resources provides us with a strategic addition to the portfolio.”
Significant upside
Spartan’s flagship operation is its 100%-owned Dalgaranga gold project in WA’s Murchison region, while its recent high-grade Never Never deposit discovery has identified significant upside.
Never Never is considered one of Australia’s most exciting new gold discoveries.
Its mineral resource sits at 721,200oz with an estimated 3.83 million tonnes at 5.85 grams per tonne gold.
