Ramelius Resources Limited

Thank you for standing by and welcome to the Romelius Resources FY26 Financial Results Conference Call. All participants are in a list naming mode. There will be a presentation followed by a question and answer session. If you wish to ask a question by the phone, you will need to press the star key followed by the number one on your telephone keypad. And if you wish to ask a question by 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 Zettner, Managing Director and Chief Executive Officer. Please go ahead.

Thank you, Harmony. Good morning, everyone. Thank you for taking the time to dial into our FY26 results conference call. Alongside me this morning is our General Manager of Finance, Ben Ringrose, who will drill down into the numbers after I've covered off on the highlights. Dan Millman, our CFO, and Tim Hewitt, our COO, are also both in the room for any Q&A that might come up after our initial comments. We have uploaded to the ASX platform along with our website a number of documents this morning, including our FY26 financial results summary, our audited statutory financial report and a presentation that we'll be speaking to today. So if we start on slide three and look back at the year for Remelius in which we increased returns to shareholders and also focused on consolidating our asset base to achieve production of plus 500,000 ounces per annum. by FY30. We made a commitment to shareholders in December to maintain our returns through this period of investment into the business. Pleasingly, we were not only able to maintain these returns in FY26 but grew them with our $250 million share buyback program. I will touch more on our shareholder returns later in the call. From an asset point of view, we continue with our focus on the high-grade, high-margin projects with the acquisitions of the Dalgaranga goldmine early in the financial year. We also entered into an agreement for the sale of our non-core Edna May hub for $300 million, which we expect to complete in September. It was a very busy year again in FY26, with the obvious focus being on the world-class Dalgaranga asset, where we announced the maiden Never Never Underground oil reserve of 1.6 million ounces at 7.3 grams per tonne, and completed a PFS with an NPV of 3.5 billion and a base case of 4,500 Aussie. At $6,000 per ounce, closer to today's price, the NPV increases to 6.4 billion. Along with the PFS, we selected a preferred milling option for the Dolgoranga ore with a single processing plant at Mount Magnet with a capacity of up to 5 million tonnes per annum. We look forward to updating the market with a four-year production outlook to FY30, including full FY27 guidance details in September, once we have finalised the EPC contract for Stage 2 of the Mount Magnet mill upgrade, and also settled on new life of mines at our Mount Magnet assets. At Rebecca Rowe, we completed the DFS in October 2025, which showed an NPV of $692 million, noting that at $6,000 per ounce gold price, this increases to $2.1 billion. On the back of the DFS and the compelling economics, the Board made an FID on the project, subject only to Rowe environmental approvals. Before we get to the financials, I wanted to touch on our track record of delivering on guidance on slide four. FY26 was the sixth consecutive year we had met our production and cost guidance, which is something the team here is very proud of, and it's front of mind whenever we consider our commitments we make to the market. As I said earlier, we will be providing an updated four-year production outlook. At this stage, we are targeting the week commencing 21 September. This outlook will include full production and cost guidance for FY27, but what we are seeing here, like our peers, is inflationary pressure on costs, higher royalty charges from higher gold prices, and higher fuel costs with the ongoing Iran conflict. In addition to this, and as a direct result of exploration success during the year, we have extended the life of mine at our Galaxy operation out to 2032. noting that this was previously only out to 2028 and also with a planned production rate looking to increase to 800,000 tonnes per annum compared to 600,000 tonnes per annum in the previous plan. It is expected the additional development required in FY27 will add approximately $30 million to oil and sustaining costs which is equivalent to around $130 an ounce. I will note that we have already provided exploration guidance of between 90 and 110 million for the FY27 year. With that, I'll now hand over to Ben.

Thank you, Mark, and good morning to you all. For those following on the presentation, I will initially be speaking to slide five and our financial highlights for the year. The business generated an underlying EBITDA of 765 million from the sale of 192,000 ounces and a record 74% margin. which is exceptionally strong in this year of consolidation and transformation. As we've said throughout the year, it's a fantastic time to be a gold miner and that is evidenced with the EBITDA per ounce of over $4,000. Now whilst we have seen a drop in production with the completion of operations at Edna May in the prior year, what is really pleasing to see is the increase in the EBITDA margin. With further high grades come from Never Never in the following years, It is going to be exciting to see Mount Magnet fulfill its potential, becoming a top fire production hub in Australia. The underlying impact for the year was just shy of $320 million, with higher DNA charge being incurred with increased challenges mined, particularly at Dalgaranga, Penny and Kew, which are mines that have a related acquisition cost being amortized. We have today announced a $0.03 per share fully franked final dividend, FY26, taking the total for the year to $0.06. Mark will discuss the dividend and shareholder returns in more detail shortly, but what I will highlight is that the paid and declared dividends for FY26, along with our share buybacks, results in $256 million being returned to shareholders for the year. This represents 65% of our underlying free cash flows. Now, throughout the documents released today and the presentation itself, we do refer to underlying earnings to give you a better understanding of the operational performance. A reconciliation of the underlying and statutory earnings can be found in the appendix to the presentation. These adjustments do include, firstly, Spartan acquisition costs of $133 million, of which $131 million relates to stamp duty on the transaction. This stamp duty has now been paid. but was recognised on our balance sheet as a payable at 30 June. Secondly, the Spartan Private Royalty Obligation Fair Value Adjustments of $55 million. This is a non-cash adjustment to the current earnings and relates to the fact we expect higher revenue in the future based on our increased confidence in the ore body with the maiden 1.6 million ounce ore reserves and higher consensus gold price forecasts. Ultimately, this is a positive. However, we must recognise an expense to earnings with the future royalty payments associated with higher revenues. And lastly, during the year we closed out our remaining FY27 gold forward contracts at a cost of $28.4 million. We can see the positive impact this had on cash flows in Q4 when there was no hedging in place. Moving on to slide 6 and the cash performance and closing position for the year. As you would expect with the completion of Edna May and period of capital investment, the cash metrics, while still exceptionally strong, were down on FY25. Business generated over $700 million in operating cash flow, which after growth capital and exploration resulted in an underlying free cash flow of $393 million, or over $2,000 an ounce. After considering the net cash to acquire Spartan, income tax and hedge book management, the overall free cash flow was $149 million. After shareholder returns, the closing cash and gold position was $650 million, which, when coupled with our undrawn credit facility, leaves us with liquidity of $1.1 billion. Again, the appendices provide a reconciliation between these cash metrics and the statutory cash flow in the financial report. Still on cash and slide seven, I want to highlight the cash return to shareholders in the year. A total of $255 million of cash was returned to shareholders, a 263% increase by way of the final FY25 dividend, the interim FY26 dividend and share buyback program. In addition to this, we've returned $38 million to shareholders by way of our dividend reinvestment plan in the year. This clearly demonstrates that not only did we maintain shareholder returns in FY26, we grew them, which in this period of lower production and higher capital is a testament to our balance sheet strength and confidence in our growth plan to in excess of 500,000 ounces per annum by FY30. Capital investment in the business, the way of growth capital exploration and the acquisition of Spartan grew 19% to 390 million. making up just over 50% of our use of operating cash flow. On the chart on the bottom left of this slide, we show the quarterly cash flow across the year, and what can be seen here is a notable increase in the underlying free cash flow in the second half of the financial year, particularly in Q4 with production from Never Never and no hedge fund commitments. Finally, before I hand back to Mark, I want to touch on the balance sheet on slide 8. which has seen a notable change with the acquisition of Spartan. Our working capital position remains strong after capital investment and shareholder returns at just over $460 million, whilst net assets increased to $3.9 billion. Importantly, our balance sheet and future production cash flow leaves our development pipeline fully funded without drawing on our credit facility. I will now hand proceedings back over to Mark, who will give a recap on operations and projects before discussing the dividend decay today.

Thanks, Ben. I'll be picking up on slide nine at the Mount Magnet Hub, starting with a recap on the year. We certainly achieved a lot, making solid progress on multiple fronts. From a project's point of view, following the Never Never PFS and integration studies, we focused on both Delgarenga infrastructure and the Mount Magnet plant upgrade. Work on the Mount Magnet plant upgrade focused on the front end engineering and design and commencement of stage one of the upgrades, that being the refurbishment of the existing 1.9 million tonne per annum ball mill drivetrain. A major plant shutdown is due to occur in October this year, in which a lot of the new equipment will be installed and modifications made to the existing plant, again all associated with stage one. In conjunction with this, we are close to finalising the EPC contract for Stage 2 of the mill upgrade, which is the new 3 million tonne per annum circuit, and we'll provide an update to the market with the four-year production outlook and FY27 guidance, as mentioned earlier. At Dalgaranga itself, capital works across the site progress well with a focus on the pace plant, you can see the picture on the top right, and refurbishment of site infrastructure including the camp, offices and workshops. Also, by the end of the year, the main underground pump station was commissioned and in use. In the coming year, we will complete the remaining capital works, including the paste plant, obviously, which is nearing commissioning, and other site infrastructure, as well as commence road upgrade works on the 65-kilometre stretch between Dalgaranga and Mount Magnet. Operationally for FY27, we will further increase mining rates at Nevernever, as we ramp up towards our targeted 1 million tonnes per annum at that mine. At Mount Magnus, we'll commence the Eridana Stage 3 open pit in November, whilst at the same time increase mining rates at Galaxy and extending its mine life. There's also promising underground potential at Kew, specifically at Breaker Day and Lena, which we'll explore further in FY27. Again, details will follow later this quarter. Just also noting that our 2026 Resources and Reserve Statement will be released next week, which will form the underlying basis or underpin our new Mount Magna Hub life of mine. Moving to slide 10 on Rebecca Road, our next processing hub, we've made great progress in bringing this exciting new project to fruition. In addition to the DFS and FID mentioned, We did reach a native title mining agreement with the Gaggarah Part B native title holders and also late in the financial year we had confirmation from the PPA that the Roe Environmental Approval Pathway will be streamlined through the established Part 5 process. Looking forward at Rebecca Roe, we'll work to obtain the Part 5 works approvals and relevant licenses, further optimize the mining schedule upon Roe approval, but also continue exploration down deep of the current open pits to extend project life and also commence early work such as access roads, camp, airstrip and ball fields. Lastly, before we open up the presentation, we're on slide 11 now, we have the final dividend for F526. We are proud of our track record in dividends and shareholder returns and today we are declaring an eighth consecutive final dividend This time $0.03 per share, fully franked. This coupled with our interim dividend paid in April takes total dividends for FY26 to $0.06 per share. We announced our shareholder returns in FY26 to include share buybacks, which for the year totaled $142 million of our $250 million program. With earnings now reported and our resources and reserves statement to follow shortly, our blackout period will soon be lifted and we'll look to recommence this buyback program. Shareholder returns including buyback's interim dividend and declared final dividend as Ben mentioned totaled some $256 million or 65% of our underlying free cash flow. The total dividend represents a yield of 2.1% based on the $30 June 2026 share price. A total shareholder return over the last five years of 13.1% per annum and over $1,300 per ounce sold. More than three times the $430 per ounce we noted last year. The final dividend will be paid in October. So in closing, I would like to highlight the investment case for Remilius on slide 12. Consistently paid dividends and have done so for the past eight years. and has enhanced its shareholder returns with the introduction of our $250 million share buyback program. Our focus on high-margin production leaves us with sector-leading cash flows along with now long-life assets at both Mount Magnet and Rebecca Row.

We have a credible pathway to 170% production growth to plus 500,000 ounces per annum, underpinned by the world-class Never Never Underground lines.

We have doubled down on exploration, repeating our budget from FY26 and FY27 of a midpoint of $100 million, focusing on quality high-grade targets. As mentioned, we are a reliable operator doing what we say we'll do, having met production guidance for the last six years. Lastly, we also offer the benefits of both scale and liquidity with inclusion of the key indexes, the FX100 and the GBX. That concludes the presentation. I now hand back to you, Harmony, if you can open the line for audio questions, please.

Thank you. If you wish to ask a question via the phones, you'll need to press the star key followed by the number one on your telephone keypad. And if you wish to ask a question via the webcast, please enter it into the Ask a Question box and click Submit. Your first question comes from Jonathan Sharp from J.P. Morgan. Please go ahead.

Yeah, hi there. Thanks. for taking my question. Just the first question, I just want to clear something up. When you say the FY27 cost of trend being 8% higher, does that refer to the absolute cost before the benefit of higher production or to just the audience sustaining cost per ounce?

Absolutely. So that 8% also factors in where we put out the October 2025 five-year outlook using a 4,500 gold price. So that factors in both the step up. We're probably leaning towards a 5,500 assumption as we go forward into FY27. We used the dollar diesel price in our FY25 five-year outlook plan. We're now probably trending to around $1.25. So those two factors also are incorporated into that sort of 8% number. And with the other piece, which I'm sure you might touch on the next question, was the sustaining capital. Important to flag. This is a real positive. We are looking to extend the Galaxy mine from FY28 at this stage alone to FY2032. So we're making this investment in FY27. And when you think about it, $30 million sustained capital investment in FY27, and Galaxy alone in FY26 generated just under $90 million in free cash flow. So real capital intensity is an amazing result, I think we will see. And we're not done yet. We think about Galaxy investing another $25 million, $30 million in Galaxy alone, given what we're seeing. and looking to share those results on expiration next Tuesday is probably what we're targeting on that reserves and resource update. So long-winded answer to your question, but I think it's worth the flag a few of those points.

Yeah, that's great. And you answered a few things there that I had to follow up with. Just one other one there on the cost. What are you assuming for diesel in FY27?

At the moment, we're probably landing, we were landing at around $1.25 a few weeks ago. That was sort of more factoring in a higher cost for the first six months and then a lower cost in the preceding six months. But I guess we'll see what Mr. Trump does next week to see where that lands. But that was sort of the basis of that 8% within there.

Yeah, I understand it makes it hard with what's going on. And then just second question is, should we think just with Never Never production is that materially second half weighted in FY27?

Yeah, hi John. Yes, it is. Yeah, the back half of the year we really start to see the decline that we're driving down really expand those production areas so it will have further weight towards the back half of the year.

Yeah, okay. Any ratios there you can give us?

No, it's top of my head.

Okay. That's fine. Thank you for that. I'll pass it on.

Thank you. Your next question comes from Adam Baker from Macquarie. Please go ahead.

Hey, Mark and Tim, just a follow-up on Dow Granger. And, no, you've got the five-year plan coming out next month, so don't jump the gun too much here. But, you know, now that the PACE plan is here and commissioning and, you know, I know you've still got a bit of upgrades to go, but, you know, are we seeing any upside to that 0.6 million tonne number that you had in last year's outlook? You know, potentially getting to that 1.1 million tonne number quicker?

I'll grab that one, Tim. Sorry, it's a little bit hard to hear you, Adam, but your question was around whether we see upside on the 600,000 tonne ramp up at Dogaranga. Look, I think we'd be looking to be in line with the ounces profile, remembering we're going from zero in March and completing FY26 with 200,000 tonnes around 600,000 tonnes in 27 and getting to a million. So I think that's a pretty aggressive ramp up and I'd like to think that we're in line with that. I don't think there's a lot of upside that we could be putting on the table at this point in time.

Yep, that's clear. Thank you. And especially just to follow up to John's, but on that 8% fire cost year on year, Just to clear this up, is it 8% higher on everything, or is it just 8% higher on cash operating costs? And then, you know, if we're looking at the AISC basis, it could potentially be a bit higher than that number, given the uplift at Galaxy. Thank you.

Yeah, we'll try to keep it simple. As I said earlier on that one, we're sort of going to give a look at the 2025 guidance we have for FY27 looking in ballpark of the 8% on top of that, plus the sustaining capital we talked about on Galaxy. Within that 8%, we're factoring in employees, wages increasing around that 6% to 7% range, obviously. explosives and different elements as well. So that's the whole kit and caboodle per se within that 8%. And as I said earlier, gold price, diesel. So I think we've maintained it pretty well. We're always looking for that competitive process when we get to tenders. And I think probably the thing that we will obviously get into when we issue in September the outlook, we do see that creep up. moving into the capital element, if not at a higher level than that. So just be mindful of that.

Okay, thank you. Thanks, Dan.

Thank you. Your next question comes from Levi Spry from UBS. Please go ahead.

G'day. Good morning. Thanks for your time, Mark. Darren, Tim, I guess I'm looking forward to these updates in the next couple of weeks. Just ahead of that, I just want to make sure I've got the cash number right. So can you just confirm the standard duties being paid for Spartan and then, you know, what your sort of expectations are around the net proceeds after some tax on the May? I think you said it completes in September.

Hi, Levi. It's Ben here, mate. So the first question on the stamp duty, yes, that has been paid in July now. And there's a second question on the net Edna May proceeds. So $210 million is the cash component of that, as you will have noticed. We're expecting the tax on Edna May to be $40 to $45 million. We'll settle that in around December this year. That's also... Awesome. Thanks, Ben.

That's...

It's reflected in our balance sheet as well, that tax payable, so you'll see it there. Roger. Okay. Thank you. Thanks.

Thank you. Once again, if you wish to ask a question, please press 1 and wait for your name to be announced. Your next question comes from Hugo Nicolacci from Goldman Sachs. Please go ahead.

Morning, guys. Congrats on cracking here. Firstly, just about magnet mill expansion. Again, appreciate you giving that guidance next month, but If I look back at the last outlook, I think your mill expansion spend was about $220 million including the water pipeline. You've touched on your operating costs going up about 8% year on year. With the final tenders that EPC works for the mill in hand, what level of cost escalation are you seeing on that mill capex?

at least sort of 10% to 15% is sort of where the numbers are landing. Obviously, we're going through a competitive fee process, so we have different numbers, so I can't be any more definitive than that. We're working through not only the cost side of it, the time and the quality of the design. There's obviously more than one factor there. But if you look at what everyone else has done in terms of updating their CapEx numbers, I probably see us being not too dissimilar to that, even though the idea of having a competitive feed process is to try to keep a lid on that as much as possible, Hugo.

Yeah, no, it makes sense, impacting everyone with the number of projects going on, and so essentially that's the next couple of weeks, so sort of early to mid-September, we should expect that update then.

Yeah, I said 21 December for the full cake, if you like, the full four-year plan, and FY27 guidance, but obviously ahead of that, will be looking to finalize the EVC and that's a key part of obviously that plan.

Great. Cheers, man. Have a good one.

Thank you.

Thank you. Your next question comes from Richard Knight from Baron Joey. Please go ahead.

Hi Jim, thanks for the call. I just wanted to follow up on something you said earlier on the call, just around the potential ramp up in volumes at Galaxy towards 800,000 tonne per annum. Again, understanding that you have the mine plan coming out in a month, can you give us any indication of what the timing of that looks like?

Yeah, just on Galaxy, we're ramping up and we should sort of hit that sustaining level around FY29. So there's a couple of ventilation upgrades we need to do and also that capital investment that Darren talked about earlier just to open up some more levels. That's probably the key thing there.

Yep, yep, okay. Thanks. And just one more just on the dividend. In terms of the mix of base dividends versus the buyback, Looking into next year, should we think of that base dividend as, you know, you'd like to have that as, you know, a sort of progressive, a base for a progressive dividend? I mean, is that the thing? Obviously, you know, we have to make forecasts around dividends for the next year and there's a lot of moving parts and it depends on, you know, what the year looks like at the end of the year. But, yeah, how should we think about that in terms of sustainability? That makes sense for sure.

I think... Darren. Hey, Richard. The maintain and grow was the philosophy that the board put to us back in December. We established a $250 million buyback. We set that minimum two cents per share per year, and obviously we're now at six. I would put forward come September, October, we'll revisit sort of what that looks like, but I think your working assumption should be two cents is the minimum. We will, as you know, we can pivot or the board can pivot between what we use that $250 million, if not more, on between dividends and buybacks. So we will react accordingly on best use in our view for our shareholders. So we saw the opportunity. We set that $250 million based on $4,500 AUD. and a lot of that, that upside we saw in the dividend, we've decided to push towards, in a gold price, we've pushed towards the dividend. So that's how we saw that. We'll make another call once we set the gold price. It's at $5,500 for over the next four years and that'll also dictate where we go with the dividend policy. But at the moment, I think your working assumptions still should be at that $0.02.

Okay, brilliant. Thanks, Darren.

Thank you. Once again, to ask a question via the phones, please press star 1. And to ask a question via the webcast, please enter it into the Ask a Question box and click Submit. Your next question comes from Ashley Chan, a shareholder. Please go ahead.

Hi, Mark, and hi, Grameenia's team. Thank you very much again for another excellent result. I just got a question more for the longer term. If we look back the last 10 years, let's see, Romelius has a very good capital for a lease, a lease going up eight times, so that's about 22.5 cents per annum. So looking forward, do you see that there are, in your current assets, you've got enough options there to take advantage of a... gold prices were to significantly move higher do you have enough indicated and inferred resources to bring into production do you have enough spare capacity at your existing plant or potential to expand plant and can you call on additional labour easily to ramp up production from indicated and inferred resources if gold prices were to be significantly higher I'll take that one I will attempt to

You'll see next week our resources and reserves statement and that underpins obviously a very long life. The last I saw was at Mount Maiden it out to 2043. The other thing with capacity to process more funds at a higher gold price, at this stage higher gold price just essentially means we'll make more cash flow. We're one of the lower cost producers. But in terms of flexibility on processing, we're purposely... talking about whilst it'll be targeted initially at a 4.3 million tonne per annum plant at Mount Magnet, we have got the capacity to go up to 5 million tonnes. And whilst we will be taking some bits and pieces from the Dolgoranga plant, we still have an approved footprint, tail stand and a large proportion of that plant in place if we are to have ongoing exploration success at Dolgoranga. So I think we do have options to increase production over what we've called our base case, and we'll see some of that come through. It'll be flagged in the resources and reserves, but obviously the rubber will hit the road with the four-year plan, 21 September.

Thank you. Thanks very much.

Thank you.

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

Thanks, Harmony. I'm not sure if it's working or not, but I don't see any questions on the webcast. We have had half a dozen questions, so it doesn't sound like there's any more. I just want to thank everyone for their time. Have a great Friday.

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