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Ramelius Resources raises 2024 production guidance

Unlike Gold Road Resources (ASX:GOR), which surprised investors with a cut to its 2024 production guidance on Monday, Ramelius Resources (ASX:RMS) has increased its guidance for the year ending in June.

Gold Road operates on a calendar financial year, so its lowered guidance compared to 2023 is yet to take effect. Meanwhile, Ramelius has raised its June 30 forecast, indicating better-than-expected mining operations in the six months leading up to December.

Ramelius has revised its guidance for both the six months ending in June 309 and the entire 2023-24 financial year. The company attributes this positive adjustment to stronger forecasted gold production in the second half of FY24, especially from the Edna May hub.

The upgraded guidance for the second half of FY24 now ranges from 140,000 to 155,000 ounces, compared to the previous guidance of 135,000 to 150,000 ounces. Consequently, the company has increased its guidance for the full 2023-24 financial year to 265,000 to 280,000 ounces, up from the previous guidance of 250,000 to 275,000 ounces.

However, this increase in production comes at a higher All-In Sustaining Cost (AISC), which partially offsets the enthusiasm. Ramelius attributes this cost increase to unplanned repairs on a conveyor at Mt Magnet, resulting in a one-off cost increase of AUD 179 per ounce for the quarter at its Mt Magnet hub. Additionally, a higher production contribution from the Edna May hub in the second half of FY24 will raise the overall AISC for the year, as Edna May is the higher-cost production hub.

As a result, the half-year AISC guidance for the period ending on June 30 is now forecasted in the range of AUD 1,700 to AUD 1,800 per ounce, leading to a FY24 AISC of AUD 1,750 to AUD 1,850 per ounce, compared to the previous guidance of AUD 1,550 to AUD 1,750 per ounce.

Ramelius reported that its December quarter group output was 68,524 ounces at an AISC of AUD 1,837 per ounce, which falls within the upper end of the guidance range (60,000 to 70,000 ounces). The company anticipates a continued trend of increasing gold production for the remainder of the financial year.

The first-half group production reached 124,047 ounces, at the top end of the guidance range of 115,000 to 125,000 ounces, with an AISC of AUD 1,899 per ounce.

Ramelius achieved sales of 123,736 ounces of gold for the half-year at AUD 2,809 per ounce, resulting in gross revenue of AUD 347.5 million, up from the previous half-year’s AUD 304.5 million from the sale of 121,838 ounces at AUD 2,499 per ounce.

As of the end of December, Ramelius reported having cash and gold on hand totaling nearly AUD 282 million.