The Ramelius Resources Limited (ASX: RMS) share price has been a strong performer on Monday.
In afternoon trade the gold miner's shares are up 4.5% to $2.33.
Image source: Getty Images
Why is the Ramelius share price charging higher?
There have been a couple of catalysts for today's strong share price gains.
The first is a jump in the gold price on Friday night which has given most gold miners a lift today.
So much so, the S&P/ASX All Ordinaries Gold index is up a sizeable 1.6% at the time of writing even with investor risk appetite increasing.
What else is driving the Ramelius share price higher?
In addition to the above, a positive announcement by Ramelius this afternoon has supported its share price.
That announcement reveals that the results of its Penny Feasibility Study (Mt Magnet) have been strong and led to the company's board giving the go ahead to expedite the project's development.
The study found an all-in sustaining cost (AISC) of A$633 per ounce, down from previous estimates of A$703 per ounce.
As a result of compelling financial outcomes from the Penny Feasibility Study, the company has also approved a decision-to-mine to bring the project into production in the June 2021 quarter. This is slightly earlier than contemplated by the prefeasibility study.
Management commented: "The high grade Penny project will generate significant financial returns at the modelled gold price of A$2,300/oz and current spot prices of approximately A$2,650/oz. At an assumed price of A$2,650/oz, the project generates an AISC margin of just over A$2,000 per ounce."
Edna May, Western Australia.
Furthermore, an updated mineral resource at Edna May has been completed successfully.
According to the release, the study has led to a 22% mineral resource increase from previous estimates.
Management notes that the option study for bulk underground versus narrow vein mining is progressing, and will also include consideration of Stage 3 open pit and potential interaction.
