Ramelius Resources (ASX:RMS) reported December-quarter gold production of 46,510 ounces at an all-in sustaining cost (AISC) of AUD 1,977 per ounce, with management saying both production and costs were in line with expectations and that full-year FY 2026 guidance remains unchanged.
Speaking on the company’s quarterly call, CFO Darren Millman said the quarter’s outcome was influenced by a lower milled grade, which had been flagged in the prior quarter. COO Tim Blyth added that higher mill throughput was achieved without sacrificing recovery, supported by high plant availability, an improved lifter design introduced at the start of the year, and an optimized ore blend.
Operational performance and near-term outlook
At the Mount Magnet hub, Blyth noted a planned preventative mill shutdown is expected to result in slightly lower production in the March quarter (Q3), before an increase in the June quarter (Q4) as high-grade material from Dalgaranga is expected to displace lower-grade mill feed.
On safety, Blyth said Mount Magnet recorded four restricted work injuries in the quarter and that there was “significant room to improve,” with a focus on critical controls and building a more proactive safety culture.
Operational updates provided during the call included:
- Never Never open pit (Dalgaranga): Mining commenced late in the quarter. Blyth said the open pit is a small 12-month operation containing about 15,000 ounces of gold.
- Never Never underground (Dalgaranga): The company completed 1.6 kilometers of lateral development to date and started ore mining (development material only). During the quarter, 16,000 tonnes at 3.52 grams per tonne were mined and stockpiled awaiting haulage to Mount Magnet. Stoping is expected to commence late in the current quarter.
- Cue: 341,000 tonnes mined at 1.44 grams per tonne, with performance affected by the Break of Day stage 2 cutback. Haulage to Mount Magnet was uninterrupted.
- Galaxy: Mining and processing metrics were broadly in line with the prior quarter, with processing supported by a drawdown of stockpiles.
Exploration results highlighted across the portfolio
Management repeatedly emphasized the company’s “high-grade exploration strategy,” with commentary from exploration leaders focused on how recent drilling could affect mine life and the company’s five-year outlook released in October.
At Penny, Group Resource and Mine Geology Manager Jake Ball said underground drilling confirmed the existence of a laminated quartz vein, although the strike extent was limited to less than 100 meters and grades reduced further south. Ball cited results including 0.7 meters at 41.7 grams per tonne, 0.8 meters at 77.1 grams per tonne, and 0.5 meters at 16.7 grams per tonne, with the company modeling and assessing the viability of a Penny North extension. Blyth said Penny is currently due to finish at the end of FY 2026, and the company is conceptually looking to extend operations into FY 2027, though he cautioned any extension may be limited and would depend on further work.
At Cue, Ball said resource definition and exploration drilling is aimed at converting and extending inferred resources beneath the planned Break of Day underground mine and testing nearby targets along the Starlight Basalt corridor. He highlighted drilling results including 4.6 meters at 15.2 grams per tonne, 7.5 meters at 35.8 grams per tonne, and 1.8 meters at 139 grams per tonne, as well as 1.2 meters at 27.1 grams per tonne beneath the currently estimated resource.
At Galaxy, Ball said drilling beneath Saturn and Mars supported an exploration target of 6–7 million tonnes at 2.1–2.6 grams per tonne for 400,000–600,000 ounces, which the team described as an effort to potentially double current resources. In response to an analyst question, management said grades at depth appear consistent with historical norms and that the next reserve and resource update is targeted for late August or early September, along with an update to guidance for FY 2027 through FY 2030.
Executive GM of Exploration Peter Ruzicka discussed the Hesperus area near Galaxy, describing drilling around the Hesperus Sill and comparing the geological model to other deposits in the Mount Magnet region. He pointed to results including 22.7 meters at 10.8 grams per tonne, 35 meters at 3.14 grams per tonne, and 0.5 meters at 8,590 grams per tonne, with the latter described as one of the company’s highest assay grades ever.
At Dalgaranga, Blyth said underground infill drilling continued at Never Never and resource definition drilling took place at Four Pillars. He cited results including 13 meters at 38.4 grams per tonne, 35.3 meters at 16 grams per tonne, and 11.3 meters at 22.9 grams per tonne at Never Never, plus 4.2 meters at 3.35 grams per tonne at Four Pillars. Management also said FY 2026 exploration spending allocated to Dalgaranga totals AUD 19 million, including programs at Four Pillars, West Winds, and Applewood, as well as surface drilling across broader corridor targets.
Financial results: record margin and strong cash position
Millman said the company generated operating cash flow of AUD 149.7 million and underlying free cash flow of AUD 54.7 million after growth capital and exploration investments, as well as a put option purchase of about AUD 12 million (AUD 12.3 million referenced later in the call). Closing cash and gold was AUD 694.7 million.
During the quarter, Ramelius sold 55,610 ounces at an average realized price of AUD 5,175 per ounce, resulting in sales revenue of AUD 236 million. Millman said the realized price was up 14% quarter-on-quarter due to an improved spot price and fewer hedged commitments. AISC margin for the period was AUD 3,198 per ounce, which he described as the best ever achieved by the company.
Cash flow items discussed on the call included:
- Growth capital: AUD 91.51 million, mainly tied to Never Never underground development, Break of Day stage two cutback, and infrastructure at Dalgaranga and Mount Magnet.
- Exploration and resource definition: AUD 24.8 million, focused on Dalgaranga, Mount Magnet, and Penny.
- Dividends: Cash payment of AUD 60.3 million for the final fully franked FY 2025 dividend of AUD 0.05 per share, reflecting 30% participation in the dividend reinvestment plan.
- Tax: AUD 127.8 million paid, mostly related to FY 2025, with management saying such a large final payment is not expected going forward as income tax is now being paid in advance.
Millman said hedge book commitments total 21,000 ounces over the calendar year, with monthly deliveries of 1,000–3,000 ounces, increasing exposure to the spot gold price. In Q&A, he said the hedge position had likely reduced free cash flow by about AUD 50 million during the quarter versus a fully unhedged position, and that the board would revisit whether to “clean it up” later in February.
Capital projects, shareholder returns, and upcoming reporting items
Millman outlined several project milestones during the quarter, including release of the Never Never pre-feasibility study, plans for upgrades to the Mount Magnet plant, and completion of the Rebecca Roe definitive feasibility study with board approval for a final investment decision subject to environmental permitting for Roe. He also said the company executed a native title agreement for the Rebecca Roe projects late in the quarter.
From a capital management perspective, Millman reiterated the announcement of a AUD 250 million share buyback program and an increase in the minimum dividend to AUD 0.02 per share, applicable across FY 2026 and FY 2027.
Looking ahead to half-year reporting, Millman flagged two accounting impacts tied to the Spartan acquisition. He said the company is required to recognize the future private royalty liability at fair value, with the liability estimated at about AUD 80 million at acquisition. Due to changes since July—including the release of a maiden ore reserve and a higher consensus forward gold price—he said Ramelius expects a fair value adjustment of AUD 35–45 million to be expensed in earnings for the period, noting it is non-cash. He also said acquisition costs estimated at AUD 135 million, including stamp duty of roughly AUD 130–132 million, are required to be expensed in earnings.
Among key priorities for the remainder of the year, management highlighted improving safety performance, advancing environmental approvals for Roe (with approval already in place at Rebecca), expanding exploration activity, delivering Dalgaranga ore to the Mount Magnet plant in the March quarter, and commencing plant upgrade works at Mount Magnet.
About Ramelius Resources (ASX:RMS)
Ramelius Resources Limited, together with its subsidiaries, engages in the exploration, mine development and operation, production, and sale of gold in Australia. It operates through three segments: Mt Magnet, Edna May, and Exploration. The company owns and operates the Mt Magnet, the Edna May, the Vivien, the Marda, the Tampia, the Rebecca, and the Penny gold mines located in Western Australia. It also develops Symes' Find prospect located in the Southern Cross Province of the Eastern Goldfields.
