Ramelius Resources Limited

Thank you for standing by and welcome to the Romelius Resources Full Year Financial Teleconference. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Mark Zepna, Chief Executive Officer. Please go ahead.

Thank you, Zach, and good morning, everyone. Thank you for taking the time to dial into our full year 2023 results conference call alongside its Chief Financial Officer, Tim Manners, who will drill down into the numbers after I've covered off on the highlights. Now, there obviously has been a number of releases related to the full year results loaded onto the ASX platform this morning, but Tim and I will be talking more broadly to the results presentation itself, so hopefully you do have that handy. Once we've gone through that, there will be an opportunity for listeners to ask questions. So if we go to presentation itself and start with slide three, slide three mainly shows you the flexibility we've built into our Western Australian operations over recent years with four satellite mining operations now feeding into our two processing hubs at Mount Magnet and Edna May. We had expected to see Mount Magnet reclaim the flagship mantle in FY23 and contribute a larger proportion of ounces. Ultimately, the result was an even split between the two hubs once again. This was largely a result of the delays we saw wrapping up ore haulage from the high-grade Penny underground mine to the Mount Magnet mill. If you look at the split we are forecasting for FY24, you'll see that Penny should push Mount Magnet ahead of Adena May in a material way this year. Turning to slide four. We mined slightly less ore tonnes in FY23 compared to the previous year at just over 4 million tonnes of ore, which was the primary reason for the 10% decrease in contained ounces mined. Now, it is worth pointing out that FY22 was actually a record year for these two metrics, as shown on the two charts on the right-hand side. Average head grade mined came in slightly higher than the previous year at 2.17 grams per tonne. and this metric can be reasonably expected to improve throughout FY24, as penny contributes a greater proportion of overall mill fee, and also given that penny's grade is expected to be slightly lower in Q1 than the ensuing quarters Q2 to Q4. We turn now to slide five. We have our key production figures as touched on. The delays in upgrading the penny haul road and obtaining the necessary approvals affected our ability to get that high-grade ore. through to Mount Magnet for processing right up until the last couple of months of the year. However, we're still able to make guidance producing just over 240,000 ounces at an all-in sustaining cost of $18.95 Aussie an ounce, which as we have seen is a pretty competitive cost-benefit rate. All-in sustaining cost did increase 24% on the previous year, illustrating that we are not immune to the cost pressures felt across the industry. although some of the increase in FY23 was offset by an 8% increase in the average realised gold price, which ended up at an average of 2,591 Aussie per ounce. Importantly, we saw our cost profile improve significantly in the June quarter as quad road train movements from Penny ramped up, and we expect that trend to continue through FY24. The expected reversal, referring to the chart on the bottom right, Reversal from reducing margin to increasing margin overall in sustaining costs through FY24 and FY25, which would have set Remilis apart from any of our peers, is how we see the next couple of years. Before I hand it over to Tim, I'd also like to note that on just about every metric, these results are an improvement from the last year, a significant achievement in light of ongoing cost pressures. The strong earnings and cash flow have enabled us to declare a fifth consecutive dividend, whilst we retain sufficient balance sheet capacity to fund future growth of both organic and inorganic varieties. In short, the company is very well positioned as we move forward. On that, over to you, Tim.

Thank you, Mark. So moving to slide six, we can see a snapshot of the key underlying results for the last financial year. To be clear, when we refer to underlying, we are essentially backing out the large non-recurring items in an attempt to communicate what we believe to be a more reflective result from the operations for the year and an appropriate comparative to the year before. I will, of course, discuss those one-off items shortly. Also, and for reference, we have provided a couple of appendices to this presentation, which look at some of the results in more detail and highlights trends over the past five years. So we achieved the top line revenue of $631.4 million from gold sales of 243,263 ounces. Despite selling fewer ounces in FY23, the higher realized gold price drove a 5% increase in revenue compared to last year. The underlying EBITDA of 276.3 represents a margin of 44%, which puts us right at the top of our peer group. a position we have proudly maintained for some time. The underlying NPAT of $75.3 million also represents an excellent return in a year that again presented its fair share of challenges in terms of keeping costs under control and in our case bringing penny up to speed. I will discuss cash flow and our balance sheet strength in later slides, but importantly, the underlying cash flow of $33 million was after an investment of almost $190 million in growth projects, which included the Penny and Galaxy undergrounds and the large Eridanus open pit at Mount Magnet. We saw a significant increase in cash and gold on hand at $272.1 million, with the addition of $75.1 million in cash that Breaker Resources held prior to our successful takeover and a decent homemade cash generation, particularly in the June quarter. We see FY24 as another potentially very strong year of cash build with continued high-margin production from penny, large amounts of cash released from the ROM stocks at MARTA and TAMPIA, and a reduction in capital and development year-on-year to around $50 million to $60 million this financial year. Before we move on, it is important I briefly touch upon those key differences between underlying results and statutory results. There are two material items that make up the difference between the two. The first is an impairment adjustment made to the Ednamay Underground at 30 June. This was a result of water ingress events in Q4 which restricted access to the lower levels of the mine. We made an appropriate call at year end to impair the costs incurred in developing those deeper levels in the mine which came to approximately $6.8 million or $4.8 million after tax. It is important to note that these water ingress events are not uncommon at Edna Mae. Indeed the water ingress has had no impact on FY24 gardens and furthermore through July and August our pumping capacity has increased and we are confident in re-accessing those levels. Also worth noting was that this was an asset level impairment adjustment and that at a CGU level there was no requirement for an impairment, which highlights the positive cash flows expected from the CGU group, which includes Tampia, Marta, Symes and indeed the Edna May Underground itself. The other material reconciling item from statutory to underlying results was a $7.1 million post-tax right off of exploration ground largely around Tampia, Marta and Ednamay. Moving to slide 7, this simply shows the breakdown of underlying EBITDA across the two production hubs. As Mike alluded to and as began to show out in FY23, although both hubs make significant contributions, Mount Magnet is beginning to distinguish itself again as the flagship of the business. Flexibility of the hub and spoke model and the strict financial return criteria we use in assessing new opportunities like the Q project are key to maintaining that industry-leading EBITDA margin. Slide 8 goes into more detail on cash flows over the period, which we still believe is the single most important financial measure of our business. The organic business generated $223 million from operating activities last year, and after some significant reinvestment back in short and long-term projects, we added a total of $103.2 million to our accounts, including the balance sheet acquired from Breaker. Turning to slide nine, this underlines the strength of the Remelius balance sheet. We have excellent liquidity with $272.1 million in cash and bullion and around a further 145,000 ounces of gold contained in stockpiles and within circuits at Mount Magnet and Edna May at the end of June. We still have full access to an undrawn, fully committed $100 million debt facility, which is available for use if and when we see the opportunity to utilize either for organic growth or M&A options. Pleasingly, our working capital position, which represents current assets and current liabilities, improved 77% to $293.5 million over the period. We continue to maintain what we see as a prudent approach with our hedge book, structuring it to strike a balance of cash flow certainty and spot price exposure. At the end of June, we had forward sold 211,000 ounces at an average price of 2,772 Aussie an ounce for delivery after December 2025. We expect this position to gradually reduce over FY24 with a material lift in the average price over that timeframe too. Turning to slide 10, we are proud of our track record with dividends. As a taxpayer, we believe this is an efficient way of returning capital to shareholders and are now up to our fifth consecutive year of declaring a fully franked dividend. This year's fully franked payment of two cents a share represents a payout ratio of 30% of free cash flow and a grossed-up dividend yield of 2.3%. Looking at total shareholder returns, which takes in capital growth and dividend yield, we have averaged a very respectable 21.1% per annum over the past five years. Last year saw the establishment of a dividend reinvestment plan for the first time in the company's history, with 17% of shareholders opting to take up the opportunity to use the dividend proceeds to purchase additional RMS shares. That opportunity will be available again this year with the price of shares calculated at a 2.5% discount to the 10-day VWAP from the date of election. Last year's dividend payment amounted to $7.2 million, which we saw in the cash flow chart previously, and this year we will return a total of $19.8 million, which will be paid in October this year. With that, I will hand you back to Mark. Thank you.