Ramelius’ Spartan Deal and Rising Costs Pose Integration Challenges Ahead

Record Cash Flow and Operational Highlights

Ramelius Resources has reported a landmark underlying free cash flow of A$223 million for the March 2025 quarter, marking its second consecutive quarter of record cash generation. This strong financial performance was underpinned by quarterly gold production of 80,455 ounces at an all-in sustaining cost (AISC) of A$1,492 per ounce. The Mt Magnet hub remained the powerhouse, delivering 67,464 ounces at a notably lower AISC of A$1,226 per ounce, while the Edna May operation produced 12,991 ounces at a higher AISC of A$2,802 per ounce before transitioning into care and maintenance in April 2025.

Year-to-date gold production reached 228,210 ounces at an AISC of A$1,622 per ounce. Reflecting the strong operational momentum, Ramelius upgraded its full-year guidance to 290,000–300,000 ounces at an AISC range tightened to A$1,550–1,650 per ounce, slightly higher in production but within the original cost expectations.

Exploration Success Fuels Growth Prospects

Exploration activities across the Mt Magnet portfolio yielded significant new results, reinforcing the company’s confidence in its resource base. Highlights include high-grade intercepts such as 0.55 meters at 22.5 g/t gold from Penny North, an exceptional 6.2 meters at 60.3 g/t gold from Break of Day, and substantial mineralisation at Hesperus and Saturn East. These results underscore the considerable upside potential in Ramelius’ key deposits, supporting the company’s long-term mine plan and growth ambitions.

The updated Mt Magnet mine plan, released in March 2025, extends the mine life to 17 years with a total production forecast of 2.1 million ounces, averaging 140,000 ounces annually over the first decade. The plan includes a A$95 million mill upgrade aimed at reducing operating costs and integrating hybrid renewable power solutions, reflecting Ramelius’ commitment to operational efficiency and sustainability.

Strategic Acquisition to Transform Scale and Profile

On the corporate front, Ramelius is progressing a transformational acquisition of Spartan Resources, announced in March 2025. The binding agreement envisages Ramelius acquiring all Spartan shares via a scheme of arrangement, with a fallback takeover offer if necessary. The transaction is on track for completion in late July or early August 2025.

This combination is set to create a leading Australian gold producer with a combined mineral resource estimate of 12.1 million ounces and ore reserves of 2.6 million ounces. The merged entity aims to leverage complementary assets, including Spartan’s high-grade Dalgaranga underground resources and Ramelius’ Mt Magnet processing capacity, to accelerate production growth towards a target of over 500,000 ounces annually by FY30.

Ramelius’ Managing Director Mark Zeptner highlighted the strategic rationale, emphasizing the enhanced growth profile, operational synergies, and strong market position the deal will deliver. The integration will also bring Spartan’s executive chairman Simon Lawson and director Deanna Carpenter onto the Ramelius board, strengthening governance and expertise.

Financial Position and Shareholder Returns

Ramelius ended the quarter with cash and gold holdings of A$657.1 million, up from A$501.7 million in December 2024, supported by an undrawn revolving credit facility of A$175 million. The company generated operating cash flow of A$236.8 million, with Mt Magnet contributing the lion’s share.

Reflecting confidence in its financial strength, Ramelius declared its maiden interim dividend of A$0.03 per share, fully franked, payable in April 2025. The company also maintains a disciplined hedging strategy, with 81,000 ounces of gold forward sold at an average price of A$3,216 per ounce through to December 2026, alongside zero premium collars to manage price volatility.

Safety and Environmental Stewardship

Operationally, Ramelius reported one lost time injury during the quarter, a setback after a prior downward trend in its Total Recordable Injury Frequency Rate (TRIFR). The company continues to prioritize safety, environmental, heritage, and community responsibilities, with no significant incidents reported in these areas.

Looking ahead, Ramelius is focused on integrating Spartan’s assets, advancing its mine plan updates, and progressing feasibility studies at key projects such as Rebecca-Roe. The company’s strong cash flow and exploration success position it well to navigate the challenges and opportunities in the evolving gold market.