Ramelius Resources Ltd (ASX: RMS) has more than doubled its gold reserves in its latest update, notwithstanding record gold production last financial year.
The Western Australia-focused gold miner said in a statement to the ASX that its total ore reserves were estimated to be 57 million tonnes of ore at a grade of 1.3 grams of gold per tonne, containing a total of 2.4 million ounces of gold, up 118%.
The company has calculated its mineable ore reserves using a conservative gold price estimate of $3,500 per ounce of gold, compared with the current gold price in Australian dollars of $5,875.
It also said it expected significant further increases in ore reserves during the December quarter, including a maiden resource at its Dalgaranga project, 80km northwest of the company's Mount Magnet mine.
Ramelius acquired the Dalgaranga project when it acquired Spartan Resources in July this year, and plans to turn it into an underground mining operation.
Image source: Getty Images
Strong year-on-year growth
Ramelius has grown its mineral resources every year since 2016 and continues to spend strongly on exploration, with a budget of $80 to $100 million earmarked for exploration this financial year.
The company's total mineral resources – a measure of confidence which is less than a mineral reserve – sat at 12 million ounces of gold contained in 210 million tonnes of ore at a grade of 1.8 grams per tonne of gold, the company said on Wednesday.
This translates to a total resource of 12 million ounces of gold, with the company's longstanding Mount Magnet mine in WA containing the largest resource at 4.2 million ounces, with Dalgaranga next at 2.9 million.
The company is expecting to spend $15 to $19 million at Dalgaranga this financial year on studies and exploration programs, with a view to finishing a prefeasibility study on underground mining at the Never Never deposit in the December quarter.
Mount Magnet mine life still substantial
Ramelius earlier this year published a new 17-year mine plan for Mount Magnet, under which it is expected to produce 2.1 million ounces of gold, up 37% from previous estimates.
The all-in sustaining cost of mining at the project was expected to be $1750 to $1950 per ounce of gold over the first 10 years of mining. On Wednesday, the company said:
Mt Magnet is comprised of numerous gold deposits contained within a contiguous tenement holding and located within an 8km radius of the Checkers processing facility. The mining operations are currently focused on the Galaxy underground mine (Mars and Saturn) and the Cue open pits.
Ramelius shares are currently changing hands for $3.88, not far off their 12-month high of $3.94 and well above the low of $1.93 over the period. The company is valued at $7.42 billion.
