Ramelius Resources Limited

Thank you for standing by and welcome to the Remelius Resources September quarterly report. 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 via the phones, you will need to press the star key followed by the number one on your telephone keypad. And if you do wish to ask a question via the webcast, please enter it into the ask a question box and click submit. I would now like to hand the conference over to Mr. Mark Zepna, Managing Director. Please go ahead.

Good morning, everyone. Thank you for taking the time to dial in this morning. In addition to the full quarterly report, we have also released a presentation that we'll speak to during this call. Both documents have been uploaded on the ASX platform and will also be available on our website shortly. This morning, I'm joined by our CLO, Tim Hewitt, and our CFO, Darren Millman. Tim and Darren will provide some detail on the operations and financials after I run through the highlights. Whilst the presentation as a whole is relatively high level, I do note that there is a lot more detail that can be found within the quarterly report itself. As usual, there will be an opportunity for listeners to ask questions at the end, whether that be through the teleconference or the webinar, depending on how you have joined the call. So for those who have the presentation deck handy, I'll initially be speaking to slide three. The September quarter for Remelius has been a period of both operational transition and strategic progress. A quarterly production of 55,013 ounces at an all-in-sustaining cost of $18.36 an ounce was in line with our expectations, with grades at queue reverting back closer to all reserve estimates following several quarters of overperformance. Given this and mining at Penny moving more to the Penny West deposit as opposed to Penny North, Mount Magnet production grades will be slightly lower going forward until such time that we see material quantities of Dalgaranga, specifically Never Never Ore, available in late FY26. Tomorrow we will be issuing full year FY26 guidance and a five year outlook and we encourage you to dial in for that call as well, noting It will be a little earlier, 9am Eastern, 6am Western Standard Time. Now, production for the quarter was achieved without any lost-time injuries, but unfortunately there were five restricted work injuries recorded, which resulted in a marginally higher 12-month moving average total recordable injury frequency rate, or TRIFA. Now, whilst the RWIs were minor in nature, this result is still disappointing, and our focus continues to for all employees and contractors, particularly as our exploration activities ramp up and Delveranga increases its development rates. During the quarter, Remelius launched its life-saving rules, which complement our principal mining hazards as we continue our journey towards improving our proactive safety culture. The closing cash and gold balance for the quarter was $827.7 million, up from $809.7 million at 30 June. which was after the Spartan acquisition and related costs of 74.3 million, which was net of the cash acquired from Spartan. During the quarter, we released our 2025 resource and reserve statement with mineral resources of 12 million ounces and all reserves of 2.4 million ounces, which were up 38% and 118% respectively on the 2024 numbers, but also noting that this does not include a maiden never-never PEPA or row underground or reserve. Stay tuned tomorrow for updates on both of these. Our exploration and resource definition activities for the quarter focused on drilling at the Galaxy Mine at Mount Magnet, specifically at Perseverance South in Hesperus, to further target the BIF mineralisation. At Penny, drilling was focused on extending the mine life beyond FY26. As you're no doubt aware, the Board has approved an increased FY26 exploration budget of $80 to $100 million, and with $18.8 million spent in the quarter. Tim will also talk to this a little later also. Work on the Rebecca Road DFS is currently being finalised and is planned to be published tomorrow, along with our Never Never PFS Mount Magnet Delgarenga integration studies and our five-year plan. Our transformational combination with Spartan Resources completed on the 31st of July via a scheme of arrangement. Spartan Simon Lawson and Deanna Carpenter have joined the Remedius Board as Deputy Chair and Non-Executive Director respectively, while other members of the Spartan team have crossed over, bringing with them a great deal of enthusiasm and plenty of new ideas. We're grateful to have them on board. I'm on to slide four. where you can see the chart on the left which breaks down the quarterly production. This sequential decline is not surprising and reflects the gap left by Ednamay as that operation is now in care and maintenance, and the outperformance of Q subsides as the pits transition from the oxide and transitional zones into fresh rock. With that, I'll now hand over to Tim to discuss the operations in more detail.

Thanks, Mark, and good morning to everyone on the call. I'll start on slide five of the presentation where we'll discuss the mining and production metrics. The September quarter saw us mine 560,000 tonnes of ore, an increase of 63% on the prior quarter, contributed by the mobilisation of the third fleet at Kew and the lower mine strip ratio. As Mark previously mentioned, the mine grade of 2.74 grams per tonne has decreased, and this is in line with QE mine performance now being closer to the model predictions and lower grade mining locations at both Pennywest and Galaxy. Total tonnes processed for the quarter was comparable to the prior quarter at a grade of 3.3 grams per tonne and an excellent recovery of 97.1%. Whilst mill throughput was comparable to the prior quarter, lower grades as mentioned resulted in lower gold production in the quarter compared to the previous quarter. On to slide six, we take a more detailed look at the Mount Magnet operations for the quarter. As Mark mentioned, safety is still not where we want it to be with the three restricted work injuries at Mount Magnet. We continue to focus on our critical controls and our leadership responsibility around our highest risks in the business. Open pit mining is solely focused on Q. The break of day in whiteheat pits recorded an average mine grade of 3.63 grams per tonne, 3.47 respectively, during the quarter. We have now progressed past the weather zones of the ore body and are now mining in the fresh rock at Kew. As flagged in prior quarters, we had expected the ore body outperformance to reduce as fresh rock is reached, and there are detailed tables on pages 7 and 8 of the quarterly report which show the performance of the break of day in whitehead oil bodies since commencement. Pollage at Kew was uninterrupted in the quarter, with tonnages increasing 36% on the prior quarter. At Galaxy, total mine tonnes were up on the prior quarter, with additional stoping fronts available. Now we've seen the benefit of the second jumbo that we added last year. The mine grade increased from the prior quarter, with higher grading steps making up the majority of the schedule from Mars. And the teams focalised on operational excellence and cost control can use to deliver strong results, positioning us well for the quarters ahead. Now onto slide seven and Penny. Both mined ore tonnes and grade were down in the prior quarter. Full body reconciliation performance was excellent though. and we achieved an average grade of 8.21 grams per tonne. Gold production totalled 11,109 ounces at an all-in sustained cost of $19.28 per ounce, generating a cash flow of just under $21 million. Despite the lower production, Penny continues to generate strong cash flows and our underground drilling campaign is aimed at extending the mine's life and unlocking further value. Noting that this drilling has just commenced in the target area, which is just below Penny North. Moving on to slide 8 and Q, a total of 399,000 tonnes at a grade of 2.44 grams per tonne were mined across Q and the quarter. Mine tonnes are up 95% on the prior quarter. As stated before, we've mobilised a third fleet at Q and with a declining strip ratio, we're able to access more ore. Selective stockpiling and processing allowed us to mill 202,000 tonnes of kew ore at 4.4 grams per tonne, which while down the prior quarter is still a remarkable grade to be mined from an open pit. Gold production totalled 30,625 ounces, all in sustained costs of $13.65 per ounce, generating an operational cash flow of $73.1 million. It's hard not to mention the cash flow that this asset has generated since mining commenced, with that amount now up to $420 million. Slide 9 takes us to Dalgaranga, where we've really hit the ground running, the mine being successfully integrated with the Reliefs Group during the quarter. I'd just like to shout out the team both in Perth and at site for the successful transition. A lot of hard work has gone into it and we're really hitting the ground. During the quarter, 920 metres of lateral development was undertaken in the Nevernever underground mine, with 628 metres of this done under Amelius from 31st of July. The planned addition of the second jumbo will accelerate development in the upcoming quarter, including the start of ore driving to set up the first production levels. As noted in the quarterly report, Barminco was successful in the mining tender with a four-year contract executed in the quarter also. We're making rapid progress of key infrastructure items, including installation of the interim prime event system and extension of the electrical supply underground. And we look forward to releasing our NEVA NEVA PFS and integration studies tomorrow and taking you through those. Now onto exploration. So slides 10 through to 13 talk through our exploration activities. At Dalgaranga, we drilled across NEVA NEVA Pepper and Four Pillars. Nevernever and Pepper drilling were focused on infill drilling with the results continuing to reinforce our geological model. Results for the quarter at Nevernever included 25.4 metres at 11.4, 43.5 at 11.7 and 27.6 metres at 14.4 grams per tonne. While at Pepper, drilling intercepted 13.5 metres at 6.22 grams per tonne. At four pillars we are resource definition drilling as we look to add to the inventory of the mine and results for the quarter include 6.92 metres at 4.05 and 2.26 metres at 4.51 grams per tonne. Mount Magnet, Site 11, Perseverance South, we continue to follow up after encouraging results from the June quarter and we're targeting the prospective banded iron formation or the BIF. This is immediately east of the Galaxy underground mine. Results for the quarter include 9.44 metres at 8.8 and 3.2 metres at 10.1. These high-grade intercepts reinforce the potential for further resource expansion in the Mount Magnet area. On slide 12, we talked to Hesperus Pit, which sits a few hundred metres from Saturn and was historically mined solely on the ground diorite geology. We continue to test for the ground diet posted mineralisation with deeper drilling extensions of our mineralisation and a biff in the footwall of the main ground diorite. Results for the quarter include 42.5 metres of 3.54 grams per tonne and 25 metres of three. These results again support our strategy of targeting near mine opportunities to extend mine life and enhance value. Mount Magnet has huge potential and we just need to continue drilling. Our commitment to this is reflected in our increased exploration guidance for FY26 of $80 to $100 million. Slide 13 talks to Rebecca Rowe where we continue RC drilling of the near mine targets T1, T1 North, T4, Cleo and Rebecca footwall. The Rebecca footwall drilling has also validated the previously defined Jennifer load in the process of reaching the target footwall position. Recent results there include 51 metres at 2.91 and 37 metres at 1.78.

With that, I now hand over to Gareth. Thank you, Tim, and I'm glad to be joining everyone today. I will be initially speaking to slide 14. On slide 14, we show our M&A scorecard, which many of you will be familiar with. This is an important slide for us as it clearly illustrates that our disciplined approach to M&A continues to pay off. The figures in the square brackets represent the cash and gold generated by our operations over the quarter. As Tim touched on, Q has been a remarkable investment for Remilius, with $420 million generated in free cash flow since commencement in early FY25. that investment contributed $100 million over the quarter. We look forward to discussing our Rebecca Road DFS and plans for Dalgaranga at Mount Magnet tomorrow and watch our cash rise grow over time. Moving on, let's turn to the financial highlights for the quarter on slide 15. The September quarter has been another strong quarter for Remedios with $129 million of free cash flow being generated. What is really pleasing about this is that despite our lower production in Q1, which was in line with our expectation, cash flow remains very strong, demonstrating the high margins being generated by the business. During the quarter, we sold 54,773 ounces at an average realized price of 4,528 per ounce, which includes a mix of spot and committed forward sales. This results in total revenue for the quarter of 248 million. The realised price for the quarter was up 2% on improving spot price and less hedging commitments. The Australian dollar gold price improved 15% over the quarter. The oil and sustain for the quarter was 1,836 per ounce, which was impacted by the lower grade as previously discussed. The resulting oil and sustaining margin, which was the average realised gold price, less the oil and sustaining cost, was 2,692 per ounce and represents an oil and sustaining margin of 59%. On slide 16, we show a breakdown of the quarterly movements in cash and gold. Operational cash flow was 159.1 million. The operational cash flow funded growth capital investments for the quarter of 19 million. which mainly relates to the underground development at Nevernever and to the campus expansion at Mount Magnet. Our investment and exploration resource definition for the quarter totaled $18.8 million and focused on Dogaranga, Mount Magnet, Kew and Penny. The resulting underlying free cash flow for the quarter was $129 million. From this, a net amount of $74.3 million was paid for the acquisition of Spartan and transaction-related cost. This is net of $199 million of cash held by Spartan on the date of the scheme implementation. We also paid $4.4 million to Dogaranga Royalty Holders in the quarter to reduce these royalties in aggregate from 2.5% to 2%. Lastly, we paid total income tax of 20 million with 12 million of this relating to FY25 and the balance being income tax instalments made in advance for FY26. We expect to pay the final FY25 income tax payment of approximately 118 million in December quarter. As we are now paying income tax in advance and have been for some months, we do not foresee these large one-off tax payments to continue. The resulting closing cash flow goal was $827.7 million. Now, on slide 17, we show a track record of generating significant cash flows. This underpins our ability to reward our shareholders with dividends and investments in growth, all while maintaining a robust balance sheet. As you will see, we have over $1 billion in available liquidity, which is made up of cash and gold at September and our available undrawn debt facility.

With that, I'll now hand back to Mark. Thanks, Darren and team. On slide 18, we have summarised our key focus areas for the remainder of the calendar year. We continue to look to improve our safety performance. We have work to do in this area. Completion of the Rebecca Road DFS, which is to be delivered tomorrow. significantly increase our exploration activities, leveraging off the Spartan exploration DNA, which is evidenced by our increased guidance and our almost $20 million spend in the first quarter, noting that we are ramping up from a lower level previously. And finally, complete the integration studies and five-year outlook, which is also scheduled to be released tomorrow. The study will include our selected processing option at Mount Magnet slash Delgarenga, our five-year growth plan for the company, which include Doug Aranga and Rebecca Rowe, as well as detailed guidance for FY26. These key focus areas will drive our next phase of growth and value creation. If we can now open up the line for questions, please, Harmony.

Thank you. If you wish to ask a question via the phones, please press the star key on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. And if you're on a speakerphone, please pick up the handset to ask your question. And if you do wish to ask a question via the webcast, please enter it into the ask a question box and click submit. Your first phone question comes from Knox O'Neill, a private investor. Please go ahead. Pardon me, sorry. Your next question comes from Alex Barkley from RVC. Please go ahead.

Thanks. Morning, everyone. Question around the costs for this quarter. They were maybe a little bit higher than what you'd flagged in your outlook in March, and I appreciate that that's changed tomorrow. Is there any one-off costs to call out this quarter, maybe around the Spartan deal, integration, redundancy, something like that? Thanks.

Hi, Alex. It's Darren. Nothing sort of material for mine. As you know, looking to target all the previous guidance for the March 2025 subsequent acquisition of Spartan, we're targeting around the $1,800 all-in-sustaining cost sort of space, or $1,900. But for us, we're not seeing... anything sort of coming out of the blue in the context of the SPARM transaction. We've obviously paid that $74 million for all the costs that came through, so nothing that's coming out. It's really just the grade that we saw process in the quarter versus that of Q4. They've sort of largely just increased that cost, so nothing of material substance.

Yeah, if I may, Alex, it's Mark. $0.25 per share as part of the transaction represented about pretty close to $270 million and remembering that Spartan had about $200 million in cash reserves at the time so there was that delta which there may have been a feeling in the market that the cash required to pay out that $0.25 as part of the transaction was matched by the cash balance and it wasn't quite the case and that's the large Really, the transaction costs on top of that were pretty minimal. It was really the balance of that $0.25 a share. And just to comment on cost inflation, I think there's a little bit of inflation in the market from when we put our mine plan out in March. You're probably seeing sort of 5%, between 5% and 10% inflation with wages and things like that, just bumping up our costs a little bit. Obviously, the lower rounds has also played into it.

Yeah, and obviously, paying a higher royalty rate connected with a higher gold price compared to that of March 2025 too. Yeah.

Sure. And I think at the time you had that, you said the outlook penny reserve grade was maybe 14 grams per tonne and since then it's kind of come down to eight. Was that, was the higher number in your thinking when you gave that outlook or did you have an idea that it might be coming down pretty soon?

14, thanks Alex. 14 is pretty close to the penny west. or reserve grade. Sorry, the Penny North or reserve grade. Penny West is pretty much half that, around seven. So if you assume that we're mining, for argument's sake, 50% of each going forward, then you should get a combined grade closer to 10. So no, that wasn't unexpected. 14 is Penny North, but obviously a lower grade at Penny West, which is high grade but narrower than Penny North. So yeah, we expected those grades to be coming down as we mine what's left currently at Penny.

Okay, a last question for me, another one around Penny. The exploration, have you learned anything new about when the mine life ends? It's still sort of end of FY26. Is there a chance that pushes on or are you more looking for repeat lenses that could, you know, add meaningful life down the track?

Thanks. The drilling, we still have to complete the underground drilling, the surface drilling Suddenly it looks like there's potential there, but we need to finish that drilling off. And we're trying to get that done as quick as we can so we can, I guess, visualise that and hope that it does add life there. But we can't really comment on that yet until we get those results.

The underground drill rig has only just started drilling, as Tim mentioned. I think currently, even on the mine plan, that we're I think it goes into the first quarter of FY27, not by much. And the surface rig is continuing to do drilling to the north. We're following up some of the drilling there with some geophysics as well. So, no, we're still working on that. Alex?

Okay. That's all from me. Thanks very much, guys.

Thank you. Once again, if you do wish to ask a question via the phone, please press star 1 and wait for your name to be announced. And if you do wish to ask a question via the webcast, please enter it into the Ask a Question box. Your next question comes from Paul Caner from Ordmanet. Please go ahead.

Yeah, hi, Jen. Thanks for taking my question. Just obviously we're going to get a better understanding of this tomorrow, but just your thinking at the moment around sort of capital allocation, capital returns, noting you're going to go through a more capital-heavy phase over the next five years, so dividends coming down. Just thoughts on buyback, considering how strong your balance sheet is and noting your dividend policy is linked to free cash flow.

Yeah, thanks, Paul. Sarah, our board is very conscious. We are on two things. One, we're in an investment period for FY26, as the market is aware of. You know, we are having consideration to capital allocation and timing around Rebecca Rowe, and that will all come out tomorrow. But we're also, our board's also recognising this free cash flow will significantly grow very, very quickly. So, you know, we did have a chat. The board, I've had a full board meeting up at site last week, and very much the mantra of we want to maintain and grow in the context of shareholder return. So we'll sort of speak to a little bit of that tomorrow. But, you know, the decision or probably the first half of next year is when we'll really dive in. You know, we are both looking at dividends and also buybacks, which is something probably for the first half of next year, and we'll get that clarity to you.

No, that's clear. That's it for me today, gents. Thanks. Thanks, Paul.

Thank you. There are no further phone questions at this time. I'll now hand the conference back to your speakers.

Yeah, we do have one question on the webinar from Paul Davidson. What is the current hedging position and when does that hedging end? I'll let you take that one, Darren.

Yeah, so we no longer put in place forwards. We're basically just running that book off. We actually even repaid some of that hedge book early. That's 8,000 ounces. So basically the forward is largely done at the end of FY26. We have probably 8,000 ounces left there. So there's that component. We have some zero-cost collars in place for $22,500. I think the top end of the price is 5,900, 25,000 ounces. That's FY27. And, you know, we are just considering, you know, whether to potentially look at some puts or zero-cost collars, FY28. But that's sort of, once again, that'll be put out there in tomorrow's release. But once again, nothing significant. And probably the clear message is that our board and our shareholders, you know, want to have full gold price participation. So we're taking that into consideration as we move forward.

And that's all the webinar questions that we can see. There might be one more question. Harmony, that's come on the audio.

Thank you. We do have another audio question from Michael Scantleberry from yours heartlies. Please go ahead.

Yeah, guys, thanks for the call. Just a quick one from me, timing on the stamp duty payment, just when that would likely fall, given, I don't know, it's up to the state government on when they give that determination to you. And then just maybe some quick comments on Edna May, given the lack of value in the market for the asset, what's the kind of current thinking around that asset at the moment? Cheers, guys.

Hey Stan, this is Darren. So we estimate approximately 135 million due on the stamp duty. Our kind of working estimate is somewhere between six to nine months post-transaction close. So, you know, sometimes they'll sort of look for it earlier, but we've actually still got some stamp duty outstanding on previous transactions. But given the quantum, we're kind of estimating either December quarter or the March quarter in this financial year. I guess on end of May, you know, basically we are getting a lot of incoming interest. But, yeah, our focus has been to deliver the Rebecca Road DFS, the Never Never PFS slash Mount Magnet Delgahange integration in a five-year outlook. So we've been pretty busy, and you'll see that tomorrow. But I think the... The BD team here, I think, will then turn their mind to EDMA and look to respond to some of these incoming interests probably in the first half of next year and look to really recognise that value in some way, shape or form. So it's a probably job for that first half of next year in EDMA.

Very easy. Makes sense. That's all for me. Thanks, guys.

Thanks, Dean.

Thank you. There are no further phone questions at this time. I'll now hand the conference back to Mr Zettner for closing remarks.

Yeah, nothing more to add. Obviously, tomorrow is a big day. We've actually decided to split the calls because there's a lot of information to come tomorrow. I look forward to talking to you then. Have a good day. Thank you.

That does conclude our conference for today. Thank you for participating. You may now disconnect.