Ramelius Resources (ASX:RMS) management said half-year performance to December 2025 was in line with expectations, with the period reflecting what CEO and Managing Director Mark Zeptner described as the company’s “lowest production level” in the recent cycle as operations transition toward higher output later in the decade.
Speaking alongside CFO Darren Millman, Zeptner said the company produced 101,000 ounces in the half. He attributed the lower result to Edna May being placed into care and maintenance in FY2025 and the Q mine’s performance returning “closer to geological model predictions.” Despite the lower half-year production, Zeptner said production remained on track to deliver FY2026 guidance of “a touch below 200,000 ounces.”
Never Never milestone and Dalgaranga ramp-up
At the end of January, Ramelius had a 31,000-tonne stockpile of Never Never ore at Mount Magnet grading 3.6 grams per tonne. Zeptner noted this grade was below the reserve grade of 7.3 grams per tonne, but said the material was “all development ore” from the top portion of the orebody. The company plans to blend the initial lower-grade ore with other Mount Magnet ore sources from March. Zeptner said higher-grade parts of the stockpile are expected to be introduced in the June 2026 quarter following fine-tuning at the Mount Magnet plant.
On the mining schedule, Zeptner said tonnes and grade were tracking to plan, with a significant increase expected from FY2028 as the main section of the orebody is accessed.
Operating trends: higher tonnes, lower grades
Zeptner highlighted higher material movement at the Q pits, where tonnes mined increased 64% following the introduction of a third excavation fleet and mining at a lower strip ratio. However, mine grade declined 46% to 2.66 grams per tonne, with Zeptner noting the comparison period included mining from the Break of Day pit at 7.9 grams per tonne.
Group milled tonnes declined due to Edna May moving into care and maintenance, but Zeptner said Mount Magnet throughput improved 18% as a previously discussed “new line of design” was optimized, material blending was improved, and mechanical availability was “very high.” Mill grade and production were lower “as expected and planned” while the business awaits the introduction of higher-grade Dalgaranga ore, he said.
Earnings: record underlying EBITDA, acquisition adjustments
Millman emphasized the difference between statutory and underlying earnings in the half due to “significant one-off and non-cash adjustments” tied primarily to the Spartan acquisition.
- Non-recurring acquisition costs: AUD 133.2 million, including estimated stamp duty payable of AUD 131 million.
- Non-cash fair value adjustment: AUD 46.6 million related to Spartan’s pre-existing royalty obligation. Millman said this reflected a higher consensus gold price forecast since acquisition and increased confidence in the orebody following the maiden ore reserve for Never Never. He said the adjustment would recur each reporting period, driven largely by gold price and reserve changes across Dalgaranga mineral properties.
For the half, earnings were generated from revenue of AUD 485.6 million, down 4% from the prior period. Millman said lower gold production was “offset almost in full” by the improved Australian gold price and reduced hedge book commitments, which lifted the realized gold price. Underlying EBITDA was AUD 347 million at a 42% margin, which Millman called a first-half record for the company and up 13% from the prior period. Underlying net profit after tax was AUD 160 million, compared with AUD 170 million previously.
Zeptner said the half-year financial performance benefited from a strong Australian gold price and a reduced hedge book, with a 36% increase in the realized gold price. He also pointed to an “all-in sustaining cost margin of AUD 2,921 for every ounce sold.”
Cash flow, balance sheet, and hedging changes
Operating cash flow was AUD 311.6 million, broadly in line with the prior period, while free cash flow was an outflow of AUD 40 million. Millman said the outflow was not unexpected given the Spartan acquisition, increased exploration spending, and the final FY2025 income tax payment.
Ramelius ended the period with a closing cash and gold balance of AUD 694.3 million. The company invested AUD 211 million into the business, including AUD 73.4 million for the acquisition of Spartan (net of AUD 199 million cash acquired), as well as spending on development of Never Never and Dalgaranga infrastructure and exploration. Income taxes paid totaled AUD 148 million, including AUD 130 million relating to final FY2025 payments. Millman said those large one-off income tax payments had concluded, with the company now becoming “more regular payers in advance of income tax.”
Looking ahead, Millman said investors should keep in mind stamp duty related to the Spartan acquisition of approximately AUD 131 million, with timing outside the company’s control but “reasonably expected” toward the back end of FY2026.
Millman also detailed acquisition-related tax synergies, saying analysis supported transferable tax losses with a net cash benefit of AUD 105 million, compared with AUD 90 million previously flagged. He said just under AUD 20 million of losses were used in the December half-year.
On financing, Millman said Ramelius had nearly AUD 600 million in working capital and net assets of AUD 4 billion. After period end, the company replaced an existing AUD 175 million credit facility with a AUD 500 million credit facility, citing the change in capital structure after the Spartan acquisition and improved commercial terms and tenure.
On hedging, Millman said Ramelius closed out its FY2027 hedge book at a cost of AUD 28.4 million and began pre-delivering June quarter forward contracts in the March quarter. He said the company expects to have no forward contract hedges in place from the end of March, increasing exposure to the Australian gold price. He added that the company still has collars and put options in place for FY2027 and FY2028, including FY2027 collars covering 22,500 ounces with a floor of AUD 4,200 and ceiling of AUD 5,906, and put options for 40,000 ounces guaranteeing minimum pricing in the AUD 5,000 to AUD 5,750 range per ounce.
Dividend and shareholder returns
Zeptner said the company remains in a reinvestment phase, but reiterated a commitment to a minimum dividend of AUD 0.02 per share for FY2026. He said the board declared a fully franked interim dividend of AUD 0.03 per share, exceeding the minimum annual amount. Management said it was the second consecutive interim dividend and totaled AUD 57.7 million, which Zeptner characterized as AUD 574 per ounce produced.
In response to an analyst question about dividend policy amid higher development spending, Zeptner said management considers dividends alongside the buyback program and noted the company had been limited in its ability to execute buybacks since announcing the program in December. He said a “slightly stronger dividend” was warranted, and the company would reassess dividend policy as production ramps and cash flows increase.
On Dalgaranga’s underground progression, Zeptner said the company expects to be mining stope ore rather than development ore in the June quarter, “very early in the June quarter, if not before,” adding that stoping was expected in March/April and was “on schedule, if not slightly ahead.”
Zeptner closed by describing the period as a “solid half year result” delivered during a transition, with the company entering the second half with a strong balance sheet, significant liquidity, an improving production outlook, and leverage to a strong gold price environment.
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.
