Ramelius Resources Limited

Thank you for standing by and welcome to the Remelius Resources December quarterly conference call. All participants are in a listen-only mode. 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 Mark Zepna, Managing Director. Please go ahead.

Thank you, Travis. Good morning, everyone. Thank you for taking the time to dial in this morning. In addition to the quarterly report, we've also released a presentation that we'll largely speak to during the call. Both documents have been uploaded on the ASX platform and will be available on the website shortly. Once again, I am joined by our CFO, Darren Millman. Darren will provide some detail on the financials after I've run through the highlights and touched on the operational performance in our development project. As always, there will be an opportunity for listeners to ask questions at the end. For those who have downloaded the presentation deck, I will be initially speaking to slide 3. I will focus on the highlights and key achievements for the quarter. I would like to point out that there is a large amount of detail on exploration, operations and project development within the quarterly report itself. On slide 3, operationally and financially, the December quarter was exceptionally strong with the business generating a record and also sector leading $174.5 million in underlying pre-cash flow. After considering our additional investment in Spartan during the quarter of $68 million and the payment of our FY24 $0.05 per share dividend, our closing cash and gold position was just over $500 million. Our quarterly gold production was 85,311 ounces, which was a 37% increase on the prior quarter, noting also just shy of our record production, which occurred in the March 2024 quarter. The increase in production was mainly due to the introduction of ore from Kew, which performed extremely well during the quarter and also improved grades from Penny. I'll talk to these points in more detail shortly. Looking at the costs, we saw a 25% decrease in our oil and sustaining costs down to $14.91 Aussie for the quarter. Now, whilst we were guiding for a reduction in oil and sustaining costs across the year, the oil and sustaining costs for the quarter was below our expectations and obviously benefited from the outperformance of Q. Importantly, our guidance for FY25 remains unchanged at 270,000 to 300,000 ounces at an oil and sustaining cost of $1,500,000. Whilst we are encouraged by the indicative overperformance of Q grades, it is still relatively early days and we will continue to assess this during the March quarter as more data becomes available as mining and milling progresses. Unfortunately, during the quarter we did record our first LTI since May 2023. Whilst this is extremely disappointing, the incident itself which is detailed in the quarterly report was not of a serious nature. We do strive to ensure that all employees and contractors remain safe and healthy under our watch. The total recordable injury frequency rate or TRIFA at the end of December was 8.33 which was only marginally higher than that recorded last quarter. There were several milestones and advancements in our key projects across the quarter. with haulage to Kew commencing mid-November following the completion of the Great Northern Highway intersection upgrade, and also delivery of the Rebecca Rowe PFS, which is demonstrating strong economic returns. For the immediate future, our focus is on delivery of the Eridanus and Mount Magnet Mill upgrade studies and associated mine plan in this quarter, and the Rebecca Rowe DFS, which is targeting a final investment decision in the September quarter. Exploration and resource definition activities during the quarter were largely focused on Eridanus, Pennywest and the Lena pit at Kew. On slide four, I will draw your attention, sorry, we're looking here at the quarterly production breakdown for the last 12 months. If you look at the yellow Mount Magnet bars, you can see the previous September quarter we focused largely on the development of Kew. And now we see that asset in production, along with improved grades at penny, has been the main driver of increased production in the December quarter. As expected, Edna May production is slowly winding down. On to slide five, which references quarterly production stats. The standout here is the mine grade for the quarter of 7.3 grams per tonne, which is more than double that of the September quarter. and has been driven once again by grades at Q and Penny, which were 7.4 and 17.9 grams per tonne respectively. Now whilst the ore tonnes mined reduced, it needs to be highlighted that there still is a fair amount of pre-strip and development taking place at Q. We expect comparable mined ore tonnes to continue into the March quarter as we progress development before we start to see an increase in these ore tonnes in the June 2025 quarter. Mill throughput levels were maintained during the quarter with the drawdown of existing stockpiles across Edna May and also the Eridanus stockpile at Mount Magnet. On to slide 6, we're showing Mount Magnet's highlights. Production from Mount Magnet totaled just over 67,000 ounces at an all-in sustaining cost of $12.77. Open pit mining at Mount Magnet is now solely focused at Kew with the Breaker Day, Waratah and White Heat pits all being mined during the quarter. Productivity has increased during the quarter with the introduction of a third excavator which resulted in a 44% increase in material movement quarter on quarter. Underground operations continue to focus on Galaxy and Penny. At Galaxy mining was largely in line with the prior quarter whilst at Penny both tonnages and grade increased, most notably the mine grade which is attributable to stoping on the 1252 level. which is central to the high-grade plunge of the Penny North load. I would also like to highlight the overall mill grade at Mount Magnet in the quarter was 5.1 grams. This is the highest grade seen under Remelius ownership at the Mount Magnet mill. It has to be pointed out the processing team did exceptionally well in managing these higher grade of ores with met recovery levels being maintained above 96%. Before I move on from this slide, if I refer you to the pie chart, we only incorporated 20% of the high-grade material from Kew and Penny into Mount Magnet to generate $161.3 million in cash flow at Mount Magnet. Quite amazing, with plenty more to come. On to Penny, slide 7, we mined 48,000 tonnes, average grade of 17.9, as mentioned. We milled 39,000 tons at 20.5 grams and produced a little over 18,000 ounces of gold. The mine itself generated operating cash flow of 73.1 million at a very nice all in sustaining cost of 790 per ounce. Our exploration last quarter was focused on the Penny West ore body beneath the original pit with some extremely high grade hits in this area as noted on the slide. The drilling to date pretty much confirms the location and thickness of this load, with the additional drilling information to be used to refine scoping blocks. On to Kew. Slide 8, the graphic shows the break of day fit starlight load, which is where most of Kew's production in the quarter came from. Tons was mined across Kew in the quarter at a grade of 7.4. However, we were able to selectively stockpile and allow processing to focus on the highest grade material with 48,000 tons being milled at an excellent grade of 15.8. The free cash flow from Kew alone in the quarter after gross capital spend of 4.4 was 56 million and an oil and sustaining cost actually below that of penny of 723 pounds. per ounce. The high quality blend of penny and Q has generated these great results at Mount Magnet this quarter. Slide 9 on Edna Mae. Gold production at Edna Mae totalled 18,261 ounces in the quarter at an all in sustaining cost of 2,209 which as you can appreciate is highly cash generative and indeed across operations at Edna May were reported free cash flow of $32.5 million. The oil and sustaining cost was lower than the previous quarter, with the free-carried low-grade stockpiles currently being processed exceeding grade expectations. In our mind, there is no reason to think that this outperformance on grade won't continue through to the end of Edna May. At the end of the quarter, there remained approximately 400,000 tonnes at a grade of 0.8 grams per tonne, which will provide feed for the Edna May mill through the bulk of the March 2025 quarter. Slide 10 on guidance, we note both production costs and also capital guidance for FY25 where there has been no change since our initial guidance issued in August and we are tracking well to achieve these targets for FY25 having produced a little over 50% of the ounces required in the first half. Slide 11 doesn't normally appear in our quarterly presentation deck, but I think we need it in this time around. And there's probably two key points to make on this slide. Firstly, at penny, we passed an important milestone in the quarter. The operation has effectively paid back our initial investment plus the capital and is effectively $31 million in the black, courtesy of $71 million in free cash flow generated by that operation in the quarter. Secondly, if you include stockpiles at the mine, Q generated $83 million in cash flow in the quarter, which represents an excellent start to paying back the initial investment in Q of approximately $206 million. At current gold prices, we expect that initial investment to be paid back in the second half of this calendar year. That covers the highlights and operations from me. I'll hand over to you, Darren.

Thank you, Mark, and it's a pleasure to be here today. I will be initially speaking to slide 12. On slide 12, we show financial highlights for the quarter. From a financial point of view, it was an exceptional strong quarter for Remilius with $174.5 million of free cash flow being generated, our best on record by quite a margin. This demonstrates the increasing margins of the business, not only due to the gold price, but also improved mill grades. These high cash flow generating ounces would not only continue for the remainder of FY25, but also into FY26. During the quarter, we sold 80,000 ounces at an average realized price of $3,683 per ounce, which included a mix of spot and committed forward sales. This resulted in total sales revenue for the quarter of $295 million. The Australian gold price continues to increase over the quarter, reporting an 11% increase from the September 2024 quarter. We further unwound our forward contract hedge book, which now sits under 100,000 ounces, or less than a six-month production, at an average price of 3,183 per ounce. The oil and sustaining cost for the quarter was 1,491 per ounce, which was down in the prior quarter, mainly due to the impact of stronger grades from Q and Penny in the quarter. The resulting all-in sustaining cost margin of $2,192 per ounce, which is the realized goal price of $3,383 per ounce, less the all-in sustaining cost of $1,491, represents an all-in sustaining cost margin of 60%. Cost guidance to FY25 remains unchanged at $1,500 to $1,700 per ounce. While this reduction in cost was expected, the over performance of Q grades did have an impact on reducing the oil and sustaining costs for the quarter. As Mark mentioned earlier, it's early days at Q. Our geological and operational teams at Mad Magnet are performing their reconciliations of both tons and grade that have been mined and milled to date at Q, incorporating recent grade control drilling with final results during the March 2025 quarter. Looking at Mount Magnet in isolation, the oil and sustaining cost was Aussie $1,277 per ounce. Whilst total cost did increase with the planned maintenance shutdown and increased open pit mining activities, this was more than offset by improved grades and production. At the end of May, the oil and sustaining cost was $2,209 per ounce. which is a decrease from the prior quarter and better than expected with the overperformance of low-grade stockpile grades. In the past, we have made the point that EDNA may, all its outstanding costs, include the non-cash charge for the drawdown of existing stockpiles. For this quarter and going forward, this was not the case with the mill feed now being made of largely low-grade stockpiles which carry no cost on our balance sheet. Slide 13 and 14 we show a breakdown of free cash flow metrics for the quarter and historically. Gold sales of 80,000 ounces generated operational cash flow of 193.6 million and 161.1 million coming from Magnet and 32.5 million from Edna May. A total of 15.9 million was reinvested into mine development, resource definition and exploration in the quarter which focused on Eridanus, Kew and Pennywest. The resultant free cash flow for the quarter was $174.5 million or over $2,000 per ounce produced. During the quarter we had two material cash flows outside operations. Firstly, Ramirez participated in the Spartan Capital Rate increasing our position to 19.9% with the additional $68 million invested. And secondly, we paid our FY24 final dividend of 5 cents per share, which after taking into account our dividend reinvestment plan resulted in a cash payment of 43.4 million to our shareholders. The resultant cash and gold position was 501.7 million, which coupled with 175 million debt facility and value of listed investment held leaves us with over a billion in available liquidity. On slide 15, we summarised our key focus areas in FY25. We wanted to continue to improve safety performance group-wide and deliver FY25 guidance in line with our core value of we deliver and do it safely. We want to complete the Aerodynamics Underground Open Pit studies, the Mount Magnet Processing Facility study on mill upgrades, and also update our Mount Magnet Mine Plan, which will be delivered in the March quarter. Row Rebecca combined definite feasibility study to be delivered in the September 2012 quarter and increased exploration programs at Magnet, Kew, Penny and Rebecca Row. Operator, with that, we will now open the line for questions, if you could please.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then 2. If you're using a speakerphone, please pick up the handset to ask your question. The first question today comes from Alex Barclay from RBC. Please go ahead.

Thanks. Good morning, Mark and Darren. A question on the Q pits. I get reconciliation is high, and that's a positive. How long do those high-grade pits, break of day and white heat last, if you could remind me? And then has that understanding changed at all since last year's integrated Mount Magnet plan? Thanks.

Hi, Alex. Thanks. It's Mark. Just looking at the... I suppose on the queue, we possibly flagged that we might get a bit of outperformance on Greg, or maybe words to the effect of if we're going to get outperformance anywhere, it'll be the queue, especially in the top parts of the pits. And... The reason why we do reconciliation and we do additional work before jumping to conclusions that the whole camp's going to overperform is because you potentially have supergene enrichment in some areas. But just looking at break of day, we've got 130,000 ounces and white heat in reserve. It's got 40,000 ounces. So we should be enjoying these grades. There's higher grades. Obviously, we're mining the highest grade pits first for some time. But mind you, we are in that oxide zone. How the grades perform in the fresh rock, we're not jumping to conclusions on that just yet. But we'll be in very good grade at Kew for some time.

Just adding to that, Alex. We're looking to update the map magnet entire plan in March. So that'll also incorporate any changes we feel appropriate and timing of the release of that ore in that plan as well.

Okay, thanks. Just one more question. On your quite ample cash and liquidity you called out, is there any consideration to buying back your hedges or would that depend your project studies or potentially approval. Is there just a timeframe or parameters around how you'd think around the hedges?

Thanks. You thankfully answered my question. So yeah, that's right. When we put out the magnets, obviously potential eridanus larger open pit, we've got the mount magnet mill upgrade and obviously we've also got the FID decision around Rebecca Row and that's all coming in the first half of the calendar FY25. So I think once we have that full picture then we'll be looking at all capital allocations and obviously something that we may consider is reducing this hedge book but at the we're producing margins of over 60% with having this hedge book. So it's not a high priority, but it's definitely something we will look at. It's coming off pretty quick at the back end of this year.

Yeah, we're below 100,000 ounces now, but at the moment we're not currently minded to write a big check and buy it out, but we need to see the capital profile for the business, particularly over the next few years, to make good decisions on that, Alex. Yep, no problem. Thanks very much, guys.

Once again, to ask a question, please press star one on your telephone and wait for your name to be announced. We'll pause for a moment to allow parties to enter the queue. Once again, to ask a question, please press star one on your phone. At this time, we're showing no further questions. I'll hand the conference back to Mark for any closing remarks.

Thank you, Travis. One question, some sort of record. 22 minutes past the hour. Everyone must be happy with the information we've provided. Thank you for listening in. Have a great day, guys.