The Ramelius Resources Limited (ASX: RMS) share price could be on the move on Tuesday following the release of a mixed fourth quarter and full year update from the gold miner.
How did Ramelius perform in the fourth quarter and FY 2019?
During the June quarter Ramelius achieved group gold production of 47,342 ounces at an all-in sustaining cost (AISC) of A$1,106 an ounce. This comprised 30,670 ounces at an AISC of A$1,078 an ounce at its Mt Magnet site and 16,672 ounces at an AISC of A$1,171 an ounce at its Edna May site.
As a result, total FY 2019 production came in at 196,679 ounces at an AISC of A$1,192 an ounce. Whilst this means costs were flat year on year, production was down 5.5% from 208,118 ounces in FY 2018 and at the bottom end of its guidance range of 190,000 to 210,000 ounces.
Ramelius finished the period with cash and gold of A$106.8 million, compared to A$104.7 million at the end of the previous quarter. However, it spent A$28.2 million on capital expenditure over the period.
Guidance.
Management expects production to ramp up in FY 2020 and has provided guidance in the range of 205,000 to 225,000 ounces. Though, it is worth noting that its costs are expected to rise along with its production.
Management has guided to a FY 2020 AISC of A$1,225 to A$1,325 an ounce, which will be up 2.8% to 11.2% year on year. For the first quarter, though, the company is aiming to achieve production of between 43,000 and 48,000 ounces at a lofty AISC of A$1,375 to A$1,475 an ounce.
Managing director, Mark Zeptner, said: "It was another busy Quarter for Ramelius with the completion of a new 1 million ounce life-of-mine plan and construction of several new underground and open pit operations whilst still attaining production guidance. The FY20 year is expected to be a record production period for the Company, with mid-point production guidance of 215koz at an AISC of A$1,270/oz. Furthermore, completion of new operations at Mt Magnet, Edna May and now also at Marda, whilst initially resulting in higher capital expenditure in the September 2019 Quarter, will leave Ramelius well positioned for higher production and lower costs thereafter."
Overall, it looks as though it is a case of a bit of short term pain for shareholders in exchange for long term gain.
Elsewhere, the shares of Resolute Mining Limited (ASX: RSG) and Saracen Mineral Holdings Limited (ASX: SAR) will be on watch after update of their own.
