Ramelius Resources Limited

Thank you for standing by and welcome to the Remelius Resources March Quarterly Conference Call. All participants are in 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. If you wish to ask a question via 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 Zebner, Managing Director. Please go ahead.

Good morning, everyone. Thank you for dialling in this morning. In addition to the quarterly report, we have released a presentation that we'll speak to during this call, noting that it also includes information from our Dalgaranga exploration update. released last week. Both documents have been uploaded on the ASX platform and will be available on our website shortly. This morning I'm joined by members of the executive team. I'm our COO Tim Hewitt, CFO Darren Millman and our EGM of exploration Peter Rezeka. Initially I'll be speaking to highlights for the quarter and we will then pass on to Tim who will speak to the operating highlights. Peter will obviously talk to the exploration results and Darren will speak to financial highlights before I close out with our priorities for the remainder of FY26. While the presentation is relatively high level, I do note a lot more detail can be found within both the quarterly report released today and the Dalgaranga exploration update I just mentioned. As usual, at the end there will be an opportunity for listeners to ask questions. whether that be through the teleconference or the webinar, depending on how you have joined the call. So, assuming you have the presentation deck handy, I'll initially be speaking to slide three. Goal production for the quarter was 38,093 ounces at an all-in sustaining cost of 2,211 Australian. This was a solid result, generally in line with our expectations given the planned six-day mill shutdown. and weather related disruptions late in the quarter. This has resulted in some production moving into Q4, but importantly our FY26 production guidance is unchanged with a strong fourth quarter expected. Tim will talk further to mill grades and expectations for the remainder of the financial year. It was exciting to see the processing of the first ore from Never Never in the quarter marking a significant milestone as we transition Delgaranga into the mouth magnet hub mix. We look forward to a more significant contribution from Delgaranga in this current quarter. For full year guidance in terms of oil and sustaining costs, we have updated the range to 1900 to 2050 per ounce, reflecting three things. The earlier than expected declaration of commercial production at Nevernever, which Stan will talk to shortly. Diesel price escalation and higher royalties from stronger gold price. I will note that the $175 increase in the oil and sustaining costs midpoint is pretty much accounted for by these three items alone. Work on the Mount Magnet plan expansion has accelerated across the quarter with a strategy to front end load the engineering design work. We have commenced preliminary site works and the establishment of the project execution there are two areas of focus for the engineering design. Firstly, the existing 1.9 million tonne full mill drivetrain refurbishment is underway and we did appoint a third party contractor subsequent to the end of the quarter who will oversee the project that we're referring to this project as stage one. And secondly, the new 3 million tonne circuit, we are focused on the front end engineering design feed And then the EPC contract is targeted to be awarded early in the September quarter. We're referring to this part as stage two. On the financials, we have completed $110.2 million worth of share buybacks, equating to 44% of our announced share buyback program, which I know is one of the largest amounts by value spent in the quarter by any Australian gold producer. But in addition to this, we closed our our FY27 hedge book and pre-delivered the Q4 FY26 hedge commitments. And despite this, we still finished the quarter with a very strong cash and gold balance of $606.5 million. Our growth projects are fully funded and we remain focused on increasing returns to our shareholders as we grow the company. And Darren obviously will talk to us in more detail a little later. On slide four, We'll see a breakdown of all sources during the quarter. What you can see here, as mentioned, that Q4 will be our strongest quarter of the year with Dalgaranga expected to contribute over 30% of production. Haulage to Mount Magnet is expected to materially increase in the June quarter with haulage rates ramping up as we speak. The 56,000 ounces planned for Q4 puts us right in the midpoint of FY26 production guidance. And with no further hedge commitments leaves this strong quarterly production 100% exposed to the current strong $8 gold price. With that, I'll now pass over to Tim.

Thanks, Mark. Good morning all. Moving on to slide five to discuss the production metrics. We mined 550,000 tonnes of ore at a grade of 2.45 grams a tonne, with both metrics being comparable to the prior quarter. Open pit tonnes mined for Kew were 26% down on the prior quarter, with a focus on stage two cutback of break of day and the commencement of big sky pit. Both of these are in a higher life of mines trip ratio for the quarter. This was offset by increased targes from the higher grade underground operations from Galaxy, Penny and Dalgaranga, all increasing quarter on quarter. Mine grades, while marginally down on the prior quarter, were in line with the model expectations. At the Mount Magnet processing plant, tons processed were down compared to the previous quarter due to the planned six day mill shutdown. Grade was similar to the previous quarter, resulting in the gold production of just over 38,000 ounces. Moving on to slide six, we take a more detailed look at the mount magnet operations. Open pit mining continued at both Kew and Dalgaranga with operations impacted by significant rainfall associated with cyclone Narelle towards the end of the quarter. All underground mines delivered strongly on development meters with focus on capital development at both Galaxy and Dalgaranga. Significantly, production commenced at Dalgaranga with the first stoke fired in Nevernever. Galaxy's oil delivery was much stronger in this quarter compared to prior. Looking forward, production is expected to be significantly higher in Q4 with increased haulage of high grade oil from Dalgaranga. The team's focus will continue for the remainder of the year on operational excellence, safe production and cost management. On to slide seven and penny. Mining at penny totaled 80,000 tonnes at a grade of 6.33 grams per tonne. However, given the weather related events late in the quarter, not all that material made it to the processing plant with 74,000 tonnes milled at a grade of 6.72 grams per tonne. for just under 16,000 ounces of recovered gold. Production has now commenced in Penny West and stoping at both Penny North and Penny West will deliver similar ounces in Q4. On to slide eight and Galaxy. Here we've combined both the operational statistics and some recent drilling results. We saw improvement in both tonnages and grade at Galaxy in the quarter, with Galaxy delivering their best quarter this year. 145,000 tonnes of this was processed at a grade of 2.24 grams for just under 10,000 ounces. Peter will speak to Galaxy exploration plans later, but as noted on the slide, we continue to see mineralisation at depth within the target zone. some of the high-grade drill results to highlight are 4.1 metres at 22.4 grams per tonne from 463.9 metres, 8.1 metres at 10.3 grams per tonne from 109.7, and 14.2 metres at 3.07 grams per tonne from 473.8 metres. Now, moving on to Q, as mentioned earlier, The focus on cure of the quarter has been on the development of stage two cutback at the break of day pit and Big Sky. So we did see that reduction in tonnes mined. Of the 252,000 tonnes mined, 128,000 tonnes were processed at Mount Magna at a grade of two grams per tonne for 7,900 ounces. Haulage was down in the prior quarter with the fleet prioritising the additional higher grade oil from Penny and the reduced mill requirements with the plan shut down. The photo there shows stage two cutback and in the background you can see some of our recent progressive rehab on the waste dump. Moving on to Dalgaranga, slide 10. The image on the left shows the current underground development, both the incline and decline positions on the Never Never deposit, with the right image showing progress made to date on the paste plant. You can see the paste pad in the background. Total lateral development at the underground was 1,690 metres, which is largely nine of the prior quarter, while good progress was made in the open pit. Still with Dalgaranga in slide 11. As you can imagine, there was a lot going on at site besides the underground and open pit mining, including the paste plant and workshop construction and the completion of the first underground pump station. The team fired their first stope successfully mid-March, containing just under 41,000 tonnes at a grade of 7.41 grams per tonne. At the end of the quarter, there's a total of 58,000 tonnes of ore at a grade of 3.23 grams per tonne ready and awaiting haulage to Mount Magnet. Haulage is expected to increase notably in the current quarter. With this, I'll now pass over to Peter.

Thanks, Tim. On to slide 12. This is the five-year production profile for Mount Magnet. And we wanted to highlight a few key points from an exploration perspective. Firstly, Mount Magnet's growth profile significantly increasing to up to 400,000 ounces per annum by FY30. On the graph on this slide, at the bottom of each year, you'll see the low-grade ore currently planned to be processed in that year, especially in the years FY29 and FY30. So you'll see in those years, FY29, 1.9 million tonnes at 0.8 grams per tonne, and in FY30, 1.8 million tonnes at 0.6 grams per tonne. Exploration opportunities in each year are highlighted at the top of the graph and are clearly linked to improvement of our future production profile at Mount Magnet by replacing that lower grade material. We currently have 10 surface rigs and four underground rigs devoted to the Mount Magnet My exploration commentary today will focus on Galaxy and Gilbys. Moving on to slide 13, the Galaxy mineralised system is open at depth with both the BIF host and the controlling structures continuing undisrupted at depth. I'll draw your attention to the ounce per vertical metre profile on the left of this figure. The drop off below around 320 metres below surface is a function of drilling density only. Continuation of geology, just not enough drilling. In January, we released an exploration target below the current classified resource based on the continuation of geology. and assumptions around the average ounce per vertical metre profile of around 2,300 ounces per vertical metre. That work saw an exploration target of 400,000 to 600,000 ounces defined. Current underground programs are looking to achieve three objectives. Identify relatively shallow lateral resource opportunities, increase resource confidence for resource to reserve conversion and upgrade the exploration target below the classified resource. This is a real opportunity to displace lower grade ore in the mine plan for FY29 and FY30. Moving on to slide 14, Gilby's Underground. We've highlighted results from the Dalgiranga exploration update we released on the 22nd of April. Conceptually, we're looking to add mineable ounces to the production profile, again in FY29 and FY30. Additional high-grade drill results from Gilbey's underground drilling include 3.9 metres of 21.2 grams per tonne, 6.1 at 10.4 grams per tonne and 7.7 metres at 5.94 grams per tonne. There's currently a mineral resource of 6.9 million tonnes at 1.9 grams per tonne to 380,000 ounces to Gilbey's Underground. We're trying to add to this with conversion of an exploration target below the current resource. That exploration target set at 2.1 to 4.7 million tonnes at a grade of 1.5 to 2 grams per tonne for 100,000 to 300,000 ounces. That exploration target is based on existing sparse drilling data, which confirms extension of the mineralised shear zones and the same host rocks at depth. Again, looking to displace low-grade 0.6 to 0.8 gram per tonne ore in FY29 and FY30. With Gilby's underground material grading at 1.5 to 2 grams per tonne, this will have a meaningful impact. Moving on to slide 15, Dalgaranga open pit potential. From an exploration lens, Dalgaranga remains the corridor for future discoveries, both to the north and south of the Gilbys mine area. Surface drilling during quarter has evaluated a number of targets in the southern Gilbys area at Plymouth, Sly Fox and Gilbys South. Last quarter, we reported a result of four metres at 42.6 grams per tonne gold from Plymouth. highlighting the high-grade potential. More recently, we've recorded a number of encouraging results from SkyFox, including 16.5 metres of 2.5 grams per tonne gold. And with that, I'll now hand over to Darren.

Thanks, Peter, and morning all. I'll now be speaking to slide 16. For the March quarter, we generated 101.9 million of free cash flow. This is up on the prior quarter, even in a period of reinvestment into the business. The oil and sustaining costs for the quarter was 2,211 per ounce and was driven by higher maintenance costs associated with the planned mill shutdown in the period and associated impact on mill throughput. Also impacting the oil and sustaining costs was the higher gold price, which increased royalty costs and added approximately $20 per ounce for the quarter. The year-to-date oil and sustaining costs of $1,987 per ounce remain below the $2,000 and leaves us well-placed compared to our peers. During the quarter, we sold 38,150 ounces at an average realized price of Australian $5,795 per ounce. which included a mix of spot and committed forward sales. We pre-delivered 8,000 ounces of the June quarter hedge book commitments, which leaves us unhedged position for the remainder of FY26 with full upside to this remarkable gold price. In total, sales revenue for the quarter was $221.1 million. The realized gold price for the quarter was up 12% on an average improving spot price and also included the impact of the hedge commitments. The Aussie gold price itself improved over the quarter by 5%. The resulting all-in sustaining margin, which is the average realised gold price less the all-in sustaining, was 3,584 per ounce, our best on record, and represents an all-in sustaining margin of 62%. Moving on to slide 17 and the cash flow for the business for the quarter. Operational cash flow was 171.3 million, an increase on the prior quarter. despite the lower production. After taking into account the cost of the Q3 hedge book deliveries of 16.1 million, this reduced to 155.2 million, which is still an increase quarter on quarter. This operational cash flow funded growth capital investment for the quarter of 51.2 million, which mainly related to underground development, never, never. The stage two cutback at break of day and infrastructure across both Dogaranga and Mount Magnet. Our investment and exploration resource definitions for the quarter totaled 26.4 million and was focused on Dalgaranga, Mount Magnet, Kew and Penny. As highlighted by Peter, we're seeing the returns on investment in our exploration results today. The resulting underlying free cash flow for the quarter was 101.9 million. This underpinned our ability to make a total cash payment of 110.2 million in shared buybacks to reward shareholders. This equates to 44% of the $250 million share buyback program announced back in December last year. Lastly, we closed out our FY27 hedge book and pre-delivered the June 2026 quarter hedges. The FY27 hedge book closure costs equated to $28.4 million and pre-delivery of the June quarter hedges in this quarter totaled $30.6 million. Assuming these answers were sold on the average spot price for the month, The remainder of FY26 is unhedged and no further contracts, no further forward contracts are currently being considered. The resulting closing cash and gold position was 606.5 million Australian. On slide 18, we provide a table noting key updates to FY26 guidance. We have increased our oil and sustaining costs to 1900 to 2050 per ounce. still remaining in the low cost quarter with the three main drivers of this increase being one, the declaration of commercial production at the Never Never Underground, one quarter earlier than planned, resulting in an additional $100 per ounce in oil and sustaining. It is important to note that this is merely a reclassification of costs from growth capital to sustaining, aligning with the fact that the mine is now profitable earlier than we expected with high gold price and high initial grades initially modeled So all in all, a positive for the business. Secondly, higher gold price resulting in higher gold royalties, which is expected to increase oil and sustaining by approximately $40 per ounce in FY26. And thirdly, diesel costs, which at current prices are estimated to impact the oil and sustaining by $35 per ounce, or $20 after factoring in our diesel hedge book. On growth capital, as mentioned earlier, we have updated our mount and magnet plant construction strategy to front-end load engineering design work, which has resulted in some expenditure originally planned for FY26 to be now incurred in FY27. But importantly, there is no impact on our overall project timing. Overall, the group level, we have revised PP&E growth capital for FY26 to 90 to 100 million. On growth capital mine development, The reclassification of never-never mine development from growth to sustaining that we just discussed has resulted in reduction in mine development growth by approximately 20 million, which at the midpoint of our production guideline equates to $100 an ounce impact. Again, I can't stress enough, overall, the sustaining and mine development costs for the never-never underground are unchanged, and it's just a classification of costs for this in the fourth quarter. On depreciation and amortization, The earlier than expected commercial production from Never Never Underground has resulted in amortization of the mine property, which resulted in the acquisition cost of the project commencing sooner than initially expected. Revised guidance for the depreciation amortization of FY26 is $310 to $330 million. On slide 19, we are highlighting our historical returns to shareholders, predominantly in the form of dividends with buybacks added to the mix in FY26. As previously disclosed, the Remedios Board wants to ensure shareholders' returns are maintained during our investment period in FY26 and FY27, then we grow the returns. In FY26, we've already exceeded FY25 returns with the interim dividend of three cents per share paid in the quarter, along with 110 million in share buybacks made. We look forward to continuing this trend as we move forward. I'll now pass it back to Mark to wrap up.

Thanks, Darren. We're on slide 20, where we have summarized our key focus areas for the remainder of the financial year. the corporate level we will continue to drive improvements in our safety performance and also closely monitor diesel fuel supply and usage whilst continuing our share by that program our exploration team will remain focused on high-grade targets as discussed by peter particularly at mount magnet and dalgaranga we'll continue to ramp up at dalgaranga underground and also ramp up the oil haulage quantities to ultimately match production levels. On the Mount Magnet plant upgrade, we'll continue with both stage one refurbishment of the existing plant and complete the front end engineering design and award the EPC contract for stage two. Lastly, we expect to hear back from the EPA on our row environmental approval during this June quarter. These key focus areas will drive our next phase of growth and value creation. We'll now open up the line for questions if we can, please, Kayleigh.

Thank you. If you wish to ask a question via the phones, you will need to press the star key followed by the number 1 on your telephone keypad. If you wish to ask a question via the webcast, please type your question into the Ask a Question box. Your first question comes from Hayden Bairstow with Argonaut.

Good morning, guys. Just a couple for me, Mark. the drilling you're doing at Mount Magnet. I mean how quickly do you think you can start defining some of those open pits because pushing that erudanus feed into stockpile rather than through the mill would be obviously pretty material on a three-year outlook. And then also can we just have an update on where the Edna May process is at too?

Thanks. Thanks Hogan. Unfortunately, bringing in new open pits that aren't currently in the mine plan, that may be a longer lead time to bring those in than we'd all like. And I'm thinking, you're thinking Hesperus, maybe Windbag, maybe a bigger Frank's Tower and those sorts of things. There is an investment at Eridanus which we think is worthwhile because ultimately once we're down into the higher grade material, That'll supply decent grade baseload feed to the mill for the long term. In terms of Edna May, we're still considering our options there. There's obviously a lot of value on the table at Edna May. At the moment, the nice thing is we don't need any ounces to deliver on our five-year plan, but we're still considering what we do with Edna May. Great. Thanks, mate. Thank you.

Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to ask a question via the webcast, please type your question into the ask a question box. Your next question comes from Ben Wood with UBS.

Morning, team. My question is just on some of the CAPEX that we'll see go from FY26 to FY27. relating to the feed project and potentially Rebecca Rowe Early Works, how much do we sort of expect of that 100 mil, say, do we expect to be carried forward? Is it the full amount or is it potentially a bit less than that?

Yeah, on the Mount Magnet expansion, probably thinking somewhere between the 50 to 75 of the FY26 number. So a lot of that, given our new strategy that Mark just spoke to. And Rebecca Rowe, we just really wanted to double down on Mount Magnet. So probably about 75% of those costs will move into FY27 also.

Thanks for that. Hopefully we answered your question there, Ben.

Yep, yeah, that's good. Thanks, guys.

We will do one final call for questions at star one on your telephone and wait for your name to be announced or type your question into the ask a question box and click submit. As there are no further questions that does conclude our conference for today. Thank you for participating. You may now disconnect.