Ramelius Resources Limited

Thank you, Jody. Good morning, everyone.

Thank you for taking the time to dial in this morning. In addition to the full quarterly activities report, we have also released a presentation this morning, which we'll largely speak to during the call.

Both documents have been uploaded on the ASX and will be available on the website shortly. Joining me again this morning is our CFO, Darren Millman.

Darren will provide some details on the financials after I've run through the highlights and touched on operational performance, our development projects and some exciting exploration results. But I would like to point out that further detail on all 3 areas that we don't cover today can be found within the detailed quarterly report itself.

As usual, there will be an opportunity for listeners to ask any questions at the end. For those that have downloaded the presentation deck, I'll initially be speaking to Slide 3.

Operationally and financially, it's very pleasing to see the business build further on a strong December quarter with record underlying free cash flow of AUD 223 million. This is our second consecutive quarterly record cash flow result and leaves Ramelius again in a sector-leading position on this metric.

After considering our final FY '24 income tax payment of $67.6 million, our closing cash and gold position was just over $657 million. Our quarterly gold production was 80,455 ounces, which was slightly down on the prior quarter, with the lower grades and tonnages coming through at Edna May as that operation transitions to care and maintenance.

Importantly, production from our lower-cost flagship Mt Magnet operation was in line with the prior quarter. The all-in sustaining cost for the quarter was, at the group level, largely unchanged from the December quarter, with lower costs from Mt Magnet being offset by the higher cost at Edna May, as Edna May continued processing lower -- and lower grade stockpiles.

Considering our results to date and the 3 quarters of the year now past, we have been able to narrow our FY '25 guidance to the upper range of production and tighten the all-in sustaining costs within the original range. We look forward to finishing the year strongly in what has been an exceptional year for Ramelius so far.

During the quarter, our technical team also completed, as promised, the reconciliation of our initial resource model at Cue, which resulted in an additional 13,710 ounces of production, which is a 31% increase on what was expected. This significantly positive reconciliation for Break of Day was attributed to an unprecedented amount of coarse gold in the weathered portions of that deposit.

This weathered zone at Break of Day was virtually depleted whilst we still have some on stockpiles by the end of the quarter. And the next phase of mining is within the fresh rock portion of the ore body, which we have pointed out previously is expected to perform more in line with the model predictions, and grade control drilling is confirming that.

On the corporate and project side of things, another busy quarter for the team here with the release of our 17-year Mt Magnet mine plan and the announcement of the transformational combination of Ramelius and Spartan. We believe that the rationale behind the transaction is strong with significant real synergies to be unlocked and continuing overwhelming support from our shareholders.

During the quarter, we did draw on our operational team's expertise as part of the due diligence process around Spartan. They provided valuable input into our processes, but at the same time, remained focused on achieving strong operational results as we have demonstrated with today's numbers together with the guidance upgrade announced.

The process around the transaction is well underway, including the integration planning which will effectively supersede the current Mt Magnet mine plan. The expected implementation date, as a reminder, remains late July, early August.

On exploration, our increased focus since the start of 2025 is already starting to bear fruit. The quarter has delivered some exciting results at our 3 highest grade projects and also uncovered significant potential below the Hesperus pit at Mt Magnet.

We have some slides on this later in the presentation, but it's worth mentioning that these results are all outside current resources. And the 6.2 meters at 60 grams per tonne at Cue and 23 meters at 10.2 grams at Hesperus by themselves would otherwise be potential company makers at a junior explorer.

On to Slide 4, just to draw your attention to the chart on the left which breaks down the quarterly production for the last 12 months. What is evident here and not unexpected is the reducing production from Edna May.

The flagship Mt Magnet hub continued at quarterly production just above 67,000 ounces, with Cue making the largest contribution in both production and cash flow generation. Slide 5, which references the company's quarterly production statistics, the standout here again is the mine grade for the quarter at 6.15, which whilst marginally down on the prior quarter is still a fantastic grade to be mining at, particularly at current gold prices.

This high-grade mining for the quarter was attributable mainly to the Break of Day, which had a mined grade of 10.5 for the quarter. In terms of ore tonnes milled for the quarter, though it was down on the prior quarters with the depletion of the stockpiles across Edna May, whilst the milled grade increased with less of the lower grade Edna May material in the overall mix.

On to Slide 6, Mt Magnet's highlights for the quarter. Production from Mt Magnet totaled 67,464 ounces at an all-in sustaining cost of AUD 1,226 per ounce.

Now that's an exceptionally low cost and possibly, in our view anyway, not appreciated by the market. And now that we've shown Mt Magnet to have a long mine life, Mt Magnet has a potential to become a much higher ranked asset in the WA gold space, along with our vision to be producing 350,000 ounces from this asset alone by FY '30.

Back to the quarter, open pit mining at Mt Magnet continued to focus on Break of Day as we've mentioned, but also the Waratah and White Heat pits at Cue. Material movement was marginally down on the prior quarter as the depth of these pits increased across the quarter.

On the underground side of things, operations continue to focus at Galaxy, at Mt Magnet and Penny. At Galaxy, mining was down on the prior quarter due to stope availability given some ventilation upgrades and development work on the Saturn side of the mine.

At Penny, both tonnages and grade were down compared to the prior quarter, although it should be pointed out that the prior quarter's performance was exceptional. As a reminder, we mined 48,000 tonnes of ore at 17.8 last quarter.

So it was a pretty high bar. Production this quarter was impacted by a lack of stoping areas, hanging wall failure in one stope and some long-hole drill availability, which are all in the process of being addressed for Q4.

On to Slide 7. And Penny, as mentioned above, not a strong quarter at Penny this quarter, but still mined and milled ore with grades above 9 grams per tonne.

The mine still generated $35 million of free cash flow at an all-in sustaining cost just above $1,500 an ounce. As I mentioned, we expect a better Q4 from Penny, and we are now in the process of accessing our first ore drive in Penny West from the recently completed incline from Penny North.

It's a little hard to see, but we have completed and we are on the level of the first ore drive in Penny West. On Slide 8 is Penny exploration.

We had followed up the previous 0.55 meters at 22.5 grams with 0.7 meters at 14 grams. The first intercept is 50 meters down-plunge from Penny North and the second hole is 40 meters below that.

Now whilst we did also have an intercept of 0.5 at 7 grams above the conceptual shoot area to the north, we are now focused on following the down-plunge position as a priority. At this stage, from a mining engineer's point of view, it looks more like Penny West than Penny North at the moment, but it definitely has our geologists excited and following up and moving the rig back to that area.

On to Cue, a total of 148,000 tonnes (sic) [ 168,000 tonnes ] was mined at Cue in the quarter at a grade of 7.2 grams, which is only slightly below the mined grade from Cue last quarter. Once again, selective stockpiling and processing has allowed us to mill Cue ore at almost 12 grams a tonne, which in turn produced $120 million of free cash flow and an all-in sustaining cost at a sort of an unheard of $610 per ounce.

Now as discussed, you can see on the image where mining has pretty much progressed down to the top of fresh rock, indicated by the squiggly dotted line, and the outperformance in the oxide zones compared to the resource model that we've seen so far is expected to now normalize going forward once we've processed some relatively modest-sized stockpiles of the oxide material that remain. On Slide 10, we see an image of the current planned pit at Break of Day, the underground mine design and recent deeper drilling that has returned 6.2 meters at 60 grams from what appears to be an extension to the left-hand lode, which is the Twilight lode.

The right-hand one being the Starlight lode, there's excellent potential for us to extend that Twilight lode some 80 meters below where it's currently modeled, which will in turn increase the depth of the mine and also the life of the underground mine at Cue, which is great news for us. On to Mt Magnet, at Hesperus 11 and 12, we've shown some exploration highlights here from Mt Magnet, Hesperus and Saturn.

The Hesperus pit sits only a few hundred meters from the Saturn pit and was mined largely in granodiorite geology, which is similar to Eridanus and other pits like Stellar West. Recent drilling has not only exposed a deeper section of granodiorite with the 98 meters at 1.79, but has also identified some high-grade potential only 250 meters below surface with the 23 meters at 10.2 gram result.

On Slide 12, this is more focused on Saturn. It looks like we have both shallow BIF and intrusive potential right adjacent to where we are developing the Saturn ore body.

In summary, Mt Magnet has plenty of untapped potential, we just need to do the drilling, which will obviously be our continued focus for the remainder of this year and into next year. Edna May, one slide here show the operating highlights for the quarter.

Gold production, almost 13,000 ounces at a respectable all-in sustaining cost given the grades at $2,800 an ounce, as you can appreciate, still highly cash generative with the operations generating $30 million in free cash flow for the quarter. The all-in sustaining cost was higher than the previous quarter, with the stockpile grades progressively lower as the mine transitioned to care and maintenance.

This transition occurred in mid-April, with a small amount of gold production between the end of the quarter and that point in time as the circuit was drawn down and the site cleaned up. With that, I'll hand over to Darren.

Thank you, Mark, and it's a pleasure to be here with you today. I'll be initially speaking to Slide 14.

On Slide 14, we note our guidance for FY '25, which has been updated to 290,000 to 300,000 ounces at an all-in sustaining cost of AUD 1,550 to AUD 1,650 per ounce. Individually, Mt Magnet for FY '25 is 238,000 to 245,000 ounces at an all-in sustaining cost of AUD 1,350 to AUD 1,450, while Edna May is expected to close out this year at 54,000 ounces at an all-in sustaining cost of AUD 2,600.

As expressed by Mark earlier, we do not expect the Cue geological model overperformance to continue as we mine fresh rock material. I'd like to highlight Ramelius' track record of generating value through M&A, which is illustrated on Slide 15.

Followers of the company will be familiar with this chart, but there are 2 points, I think, worth highlighting. Firstly, the Edna May group of assets has moved to the left and out of production.

Across the Edna May hub, Ramelius has generated $512 million in cash flow, paying back the initial acquisition cost of $153 million over 3x. Whilst these figures can be dwarfed with the current gold price, they represent an important part of the journey to which Ramelius is today.

Secondly, Cue is now very close to recouping its initial acquisition and development costs after only 6 months from the commencement of operations, generating $130 million in free cash flow for the quarter. On Slide 16, we show financials for the quarter.

From a financial point of view, it was another exceptional strong quarter for Ramelius with $223 million of free cash flow being generated, our second consecutive record on this metric. This demonstrates the increasing margins of our business, not only due to the gold price, but also lowering operating costs across Mt Magnet.

These highly cash-generative ounces will not only continue for the remainder of FY '25, but into FY '26. During the quarter, we sold 84,000 ounces at an average realized price of AUD 4,251 per ounce, which included a mix of spot and committed forward sales.

This resulted in total sales revenue for the quarter of $358 million. The Australian gold price continued to increase over the quarter, reporting an 18% increase from December of 2024 and a 43% increase from the start of the financial year.

We further unwound our forward contract hedge book, which now sits at 81,000 ounces at an average of $3,216 per ounce. The all-in sustaining cost for the quarter was $1,492 per ounce, which was in line with the prior quarter, the lower cost at Mt Magnet offsetting the higher cost at Edna May.

The resulting all-in sustaining cost of $2,759 per ounce represents an all-in sustaining cost margin of 65%. Looking at Mt Magnet in isolation, the all-in sustaining cost was $1,226 per ounce, which was 4% down on the prior quarter, with a positive downtrend across the financial year.

At Edna May, the all-in sustaining cost was $2,802 per ounce, which is an increase from the prior quarter, with the progressing lower grade being processed as stockpiles were depleted. Whilst higher cost at these gold price, these ounces are cash generative and is reflected in the results for the quarter.

On Slide 17 and 18, we show a breakdown of free cash flow metrics for the quarter and historically. Gold sales of 84,000 ounces generated operating cash flow of $236.8 million, with $206.8 million coming from Mt Magnet and $30 million from Edna May.

A total of $18 million was reinvested in mine development, resource definition and explorations in the quarter, which focused on Eridanus, Cue and Penny West. The resultant free cash flow for the quarter was $223 million or $2,500 per ounce sold.

During the quarter, we paid income tax of $67.6 million, which related to the final income payment for FY '24. Ramelius is now required to make monthly installments for FY '24 and future income tax years.

The resulting cash and gold position was $257.1 million, which, coupled with a $175 million debt facility, leaves us with over $800 million of available liquidity. With that, I'll now pass back to Mark.

Thanks, Darren. On the last slide, Slide 19, we've summarized our key focus areas, not just for FY '25, but I've made it calendar 2025.

We will continue to work on our safety performance and obviously be focused to deliver our upgraded FY '25 guidance. We have ticked a few boxes during the quarter with the delivery of Eridanus study, the Mt Magnet mill upgrade study and the updated Mt Magnet mine plan.

We do have the Rebecca-Roe combined DFS to be delivered in the September quarter. And as discussed, we are ramping up exploration expenditure across the board.

And finally, we've added in there we're aiming for completion of the Spartan scheme of arrangement in late July, early August. And following that, delivering completed integration studies, which are expected in the December 2025 quarter, if not earlier, if we can.

We'll now open the line up for questions, please, Jody.

Just on Slide 8, just talking about that conceptual third shoot at Penny. I'm just wondering how that concept came about.

Is that literally just a repeat sort of concept from Penny West to Penny, then on to the sort of Penny North, if you'd like to call it? Or is that based on some geophysical data that you have?

And then I guess the second part to the question is, I think I heard you say that geos are getting excited about and it's probably more of a Penny West than a Penny. Can you just expand on that?

What are you seeing in those drill holes that are awaiting assay? Is it structure?

Is it more structure and mineralization? Or what's it sort of look like compared to the current Penny deposits?

Yes. Thanks, Andrew.

It's Mark. On the conceptual third shoot, it's probably a combination of both.

It's position. But also, there is some downhole geophysics that has been carried out that's given some indications.

And I believe our EGM of Exploration, Peter Ruzicka, has shown that, particularly in his RIU Explorers Conferences with some of that work. So it's a combination of 2.

And the reason -- and I'd point out that I think it looks more like Penny West than Penny North, and I'm basing that primarily on the widths. At the moment, those widths look more like Penny West widths rather than the 4 or 5-meter widths that you get in Penny North.

But in an ideal world, it is down-plunge and on the -- so precisely down-plunge of Penny North, which is important. In an ideal world, we're on the edge of another shoot that does turn into a Penny North.

But at the moment, I'm just making a layman's comment based on those widths and grades, if that answers your question.

Yes, copy that, obviously, still early days. Penny West is still pretty good, if you could repeat that.

Maybe just one for Darren as well. I think I saw somewhere, yes, that you've just reduced your D&A expectation for this year.

Just wondering if you could just run through the reasons behind that.

Yes. Thanks, Andrew.

So it's primarily resulting in our mine plan sequencing on Penny. So that's the mine itself that has a higher attribute of depreciate allocated to it.

So we've got the high-class problem of having high grade both at Penny and Cue. So we've made the decision to focus more on Cue for the last 3 months of the quarter -- of the year.

And hence, more depreciation will likely be allocated in FY '26 versus FY '25. So it's just really an allocation for this year.

Just back on Penny, just those drilling results on the sort of the extensions down deep, is that sort of what you're looking for in terms of what you think this thing would extend? Or was it more chasing some wider sort of hits like you were talking about in sort of Penny as opposed to the more narrow things?

Yes. Ideally, we get some wider intercepts and we're sitting on the top of another lode, and that was the question that we posed after the first call.

If we get a large area of similar hits, then it looks like a Penny West. And at the moment, we'll be mining narrow widths like this, potentially in some areas higher grade, some areas very similar to these numbers.

So if it grows, it looks like a Penny West repeat at the current widths and grades. But hopefully, below, we do some wider intercepts.

So there's only 2 holes there. We've got the rig positioned to add some more as soon as we can.

Okay. And then just Break of Day, so you're talking about the underground sort of on Page 10 of this preso.

Is that sort of implying that the pit is pretty well done and the economic cutoff now benefits going underground from here?

There's 2 stages to the current pit. The pit you would have -- well, that people would have seen when they've gone to site is Stage 1.

Currently, we have a 2-stage pit and then go underground. Whether we revise that, I think the intercept, the 6.2 meters at 60 could really add to that Twilight lode, which is the left-hand lode, which currently is modeled to stop at 200 meters below surface.

But obviously, there's some pretty serious legs there with that sort of intercept. I suppose to answer your question, the cutoff between the current design pit and when the underground starts, yes, can be relooked at.

Usually, if you don't get it from the pit, you'll get it from underground, and the guys would have done some optimization work at, let's say, $3,000 an ounce or thereabouts. So we may or may not need to revisit that, but we're pretty excited about the fact that we're getting this sort of grade at depth on a lode that we basically hadn't modeled to go that deep.

So to have 2 lodes to go down to an area where the mine will already be designed to pick up the Starlight lode, which is the primary lode at Break of Day, which is -- is a real nice bonus for us.

And this -- and the Hesperus pit, is that in the current plan? When does that sort of come in, in terms of the base at the moment?

It is in the plan, but you have to really look for the detail. I think it's like in year 10.

So it's modest grade like a lot of the porphyries are, Darren is just trying to find it. But my understanding is that there's 100,000 ounces there which is a cutback to the current pit in the granodiorite, producing about 1 gram and in about 10 years' time.

But given what we've -- so the drilling was primarily to convert indicated -- sorry, inferred to indicated and to see what was below. And it looks quite interesting and not only the broader zones, but the higher grade is probably more interesting for me.

Because you've got a mix of geology, you've got granodiorites and Hesperus sits in an area where you have banded irons, which is the traditional geology at Mt Magnet, but also the granodiorites, and you've got a lot of faulting and thrusting and mixed-up geology there, which can produce some high grade. So we've got some numbers there.

We probably didn't expect to see 20 meters at 10. So it's a fair way out in the mine plan at the moment, but it might come forward if we keep getting these sorts of results.

And it just means that we need to be spending more on exploration, as we said. There's a lot of exploration results in the report.

There's pages and pages and lots of -- we're not spending it. But I think we really need to be hitting Magnet harder given that the last 2 years or so we've spent drilling Eridanus.

There's plenty of other places for us to be drilling then be adding resources, and Hesperus is just one of them.

And Hesperus was only assuming an open pit, these are [ pre grade at depth ], too. So a lot of potential for an underground on this.

Yes. The pit shell you see there, that 3,200 is the pit that will be in that mine plan in 2035 or something like that.

First of all, congratulations again on another excellent quarter. It's very impressive, and thanks for all your hard work.

I just got 2 questions. The first one is on Rebecca-Roe.

Do you see there opportunities to improve the economics by acquiring additional land packages around the area? Or is just Rebecca-Roe pretty much okay on a stand-alone basis?

I'll answer that one. I assume you've got another question coming, [ Ashley ].

But at the moment, on a stand-alone basis, it's got robust economics, and we've got a slide there. But I've said also publicly that I think that area is ripe for Ramelius' hub-and-spoke model.

So there will be opportunities for smaller resources around there to add mine life. And if it comes in a higher grade, to also boost grade and throughput, especially in the early years.

So I think both. It's a solid project currently, but it can be improved with opportunities in that region, which I think are pretty plentiful.

Excellent. And the only other question I had was more a request for when you do the DFS and anything published publicly, are you able to also update the sensitivity analysis for, say, different discount rate like a 10% discount rate and also $5,000 -- $4,500, $5,000 spot gold price to just update the NPVs and paybacks?

That gives a good idea of the sort of work out on different gold prices and discount rates of the project.

Yes, we will have sensitivities on different metrics as part of the DFS.

Definitely, [ Ashley ].

Excellent. And then the second question is, do you intend to do a sustainability report?

Is there a sustainability report due by Ramelius?

Yes. I think we're up to #3 or #4, at least.

So there will be another sustainability report. They have been separated in recent times.

I understand that they'll actually be put back together with the annual report as part of the new requirements around financial disclosures related to climate, et cetera. So no, there will be a sustainability report coming later in the year.

Excellent. I was just -- I guess, in sort of today's environment, whether it's positive or negative, it's just useful to see how much is -- that Ramelius puts back buys from the local communities, buying from First Nation businesses, and contributing in other ways to the community, including taxes.

Yes, yes. And that will be all included in there, along with our hybrid power purchase agreement at Mt Magnet, which is a 15-year agreement consisting of solar, battery and wind, 32 megawatts.

So there will be things like that in there which ideally provides us with a pathway to reduction of emissions. So we're working on all that stuff now.

You'll see that a bit later in the year, [ Ashley ], with all the detail you require.

Great quarter. I had a couple of questions.

Just the first one really is around what Aussie gold price you're modeling some of the lower grade deposits like Big Sky at Cue for the oxide open pit? And the other one is whether the current gold price sitting above AUD 5,000 is influencing whether you're treating mineralized waste differently and what cutoffs you're using at that?

Thanks, [ Rob ]. It's obviously a bit of a moving goalpost move on an annual basis when the gold price moves like it has.

From memory, about $3,500 an ounce is a base case that we've used not only to assess Rebecca-Roe, Eridanus, but also to run optimizations as well. And we'd be always conservative on a reserve basis.

It will be another conversation for midyear when we look to run budgets and run reserves again, and I'm sure it's something that all gold companies face without wanting to push the limit too far. When it comes to existing stockpiles, and it played out with Edna May, when you've got stockpiles that might be lower grade than your reserve that are in reserves, you'll use probably something closer to spot given the near-term potential to derive cash flow.

So you can be trucking and processing material down to 0.3, 0.4 grams per tonne at current gold prices. So the spot gold price plays into those sorts of decisions, but not your longer-term decisions.

Okay. That makes perfect sense.

Thanks, [ Rob ], and you'll obviously be happy to see how well Cue is going. And I didn't mention it specifically, but we have got a rig drilling to the north on the salt lake to -- on the Break of Day style targets directly north of where we're currently mining.

Fantastic, Mark. I'd be looking forward to seeing some of those results when they come through.

Yes. We only just started.

So watch this space.

Yes, I didn't want to add too much to what we've already talked about. Thanks, everyone, for listening in.

Enjoy the rest of your day.