Ramelius Resources Limited (ASX: RMS) Stock Tumbled Post Release of Q3FY18 Production Update

  • Oct 08, 2018 AEDT
  • Team Kalkine
Ramelius Resources Limited (ASX: RMS) Stock Tumbled Post Release of Q3FY18 Production Update

Ramelius Resources Limited (ASX: RMS) has published its Q3FY18 results wherein the company has achieved and produced 51,428 ounces of gold from the company’s operation which is located in Western Australia. Also, the company’s gold and cash balance has reached a record level of A$102.4 M at the end of the third quarter.

As per the release, the Company’s operations cater to three parts i.e., Mt Magnet, Vivien, Edna May which contributed a total of 51,428 ounces of gold and in-line with the guidance range of 50,000 oz to 54,000 ounces. The major production was from the Edna May region which contributed around 25,655 ounces of gold. The second highest production was from the Mt Magnet region which contributed 17,432 ounces of gold. Region Vivien contributed only 9341 ounces of gold which was the least amongst the three regions.

The Edna May underground was approved this quarter with the development to commence from the first quarter of March 2019. The Greenfinch open pit cleaning permit whose approval has now progressed. According to the annual resources and statement which got released on September 18, 2018, the report shows an increase in ore reserves of 54% as compared to the previous corresponding year 2017.

The company also had cash and gold in hand which was a record as compared to the previous June quarter. In June 2018 quarter, the cash and gold in hand recorded was A$95.5 M which grew to A$102.4M in the September 2018 quarter. The company has also made an expenditure of A$14m on acquiring and capital developing in the quarter at three projects namely Shannon open pit pre-Strip under Mt Magnet whose expenditure was A$5.5m. For exploration (all across the project), the expenditure was A$4.2m and in asset acquisitions which include Marda Gold Project deposit, the expenditure was A$4.3m.

On 30 September 2018, the forward sales of gold were 124,750 ounces at an average price of A$1,727 per oz over the period till March 2020. On 25 September 2018, Ramelius announced the takeover offer of all the ordinary shares of Explaurum Ltd and bidder statement was also dispatched to the shareholders of the (ASX: EXU) company. On 13 September 2018, RMS has signed a deal with Marda Gold Project located north of Southern Cross, WA for the total consideration of A$13.0 Mn. The consideration includes A$0.5 Mn non-refundable deposit which is to be paid to the Liquidators BOK to support funding 3rd party transaction costs and contribute towards the monies in the BOK creditors trust. Once it gets approved by the creditors then it will provide high-grade ore feed to Edna which may by next calendar year.

The company has a strong balance sheet which shows the company’s total asset value of A$321.93 m with total liabilities of A$119.96 M in FY18. Total equity value stood at A$201.97 m. The Company’s cash and cash equivalent consist of around A$75.02m. Cash from operating activities consists of A$118.91 m. Cash used in investing activities was A$122.89m and cash flow from investing activities was A$0.44 m.

If we observe the performance report for the past one year, the report shows an increase of 21.52%. For the past 5 years, the performance report company has performed exceptionally well and scored performance increase of 232.30 %. However, 10 years report shows a negative return of -8.40%.

RMS’s shares traded at A$0.475 with a market cap of A$253.7m as on October 08, 2018. If we see the charting of the share prices it depicts that the prices may fall. It is so because the MACD line cuts the yellow signal line from the top moving in the downwards direction.

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