• Golden run continues for upbeat Ramelius
Golden run continues for upbeat Ramelius
11 Jan, 2019, No Comment

Summary: Shares in gold miner Ramelius Resources hit a five-month high yesterday after the company exceeded December quarter production guidance and flagged possible dividend payments.....

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The Mark Zeptner-led miner has enjoyed a post-Christmas surge in its share price after all but securing takeover target Explaurum and benefiting from a resurgent gold price.

Ramelius said yesterday it had produced 52,623 ounces in the December quarter, beating guidance of 48,000-52,000oz.

The miner also reported a record cash and gold balance of $108.1 million despite spending $15.1 million on exploration and development in the quarter and $6.9 million on the Explaurum takeover.

The company noted it had secured 72.42 per cent of Explaurum after securing key shareholder support for its bid comprising a one-for-four scrip component plus 2¢ cash.

Ramelius also flagged a new dividend policy, targeting a minimum 1¢ per share annual payment subject to meeting mining reserve and cash thresholds.

Mr Zeptner said the company had been under pressure from its retail shareholder base to pay dividends and the policy provided some “line of sight” around future payouts.

The company has main-tained full-year guidance of plus-200,000oz, despite experiencing delays in securing environmental approval to begin mining at its new Greenfinch open pit at Edna May. Greenfinch is expected to provide baseload feed for the processing plant while the company transitions to underground mining.

Mr Zeptner said Ramelius would use existing high-grade and then low-grade stockpiles and ore trucked from its recently acquired Marda project to feed the Edna May mill in the interim, insisting there was no possibility of a production gap.

“It did throw us out (delays in the Greenfinch approval), but we’ve become pretty good at recovering ounces,” he said. “That’s the good thing about having multiple assets, you cover your shortcomings in one place with some over-performance elsewhere (Mt Magnet).”

RBC Capital Markets analyst Paul Hissey said the production metrics were mostly in line with the bank’s estimates but the cost of sourcing and developing additional ounces for Edna May remained a key question for Ramelius.

Ramelius shares closed up 2.5¢ at 52.5¢ yesterday.


Stuart McKinnon, 9/1/2019, thewest.com.au/business/mining/golden-run-continues-for-upbeat-ramelius-ng-b881068935z

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