Ramelius Resources Ltd (ASX: RMS) says its Never Never gold project will generate $4.6 billion in free cash flow over a mine life of 11 years, as the company laid out its roadmap to generating half a million ounces of gold per year by 2030.
This would be a significant step up from the guidance for the current financial year of 185,000-205,000 ounces of gold, with the major increase weighted towards the end of the five-year period.
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New project looking lucrative
The Western Australian gold miner on Tuesday released a prefeasibility study on the Never Never deposit, which it acquired when it bought out Spartan Resources in mid-2024.
Ramelius said it expected to produce 1.8 million ounces of gold over the 11-year mine life at Never Never, at an all-in sustaining cost of $1128 per ounce.
The company said it had based its projections for $4.6 billion in after-tax cash flow from the project on a gold price in Australian dollars of $4500. This compares with the current spot price of gold of $6078.68.
The Never Never deposit is part of Ramelius' Dalgaranga Project, which is 80km northwest of the company's Mount Magnet gold mine and processing plant.
The company said it had canvassed various scenarios for the processing of the gold ore from Never Never, and concluded that a $233 million expansion of the Mount Magnet processing plant, initially to a capacity of 4.3 million tonnes per year, was the preferred option.
There would also be $76 million in pre-production costs at the Never Never deposit and $82 million in site infrastructure costs.
Growth plans on track
Ramelius managing director Mark Zeptner said the company had now "demonstrated a clear path to deliver on our vision to become a 500,000 ounce gold producer by FY30".
Mr Zeptner said, importantly, that the growth pipeline was fully funded, and the company was in a leading position with regard to its cost of production. Ramelius is expecting to generate more than $1 billion in free cash flow per year from FY30 to at least FY35.
And Mr Zeptner said these projections were potentially conservative:
Our 5-year outlook is the base case for Ramelius with our aggressive exploration approach at our high-grade brownfield targets at Penny, Cue, Dalgaranga and Mt Magnet expected to improve on production targets as early as FY27.
Mr Zeptner said the expansion of the Mount Magnet plant was expected to start in early 2026 and would increase its nameplate capacity from two million tonnes per annum now to five million tonnes in FY28.
Importantly, as part of the evaluation process we have also been able to identify about $1 billion in real synergies which is significant in consideration of the Spartan acquisition which was valued at $2.5 billion.
Mr Zeptner said the company also recognised the importance to shareholders of capital management in the form of dividends or buybacks as the company's cash flow "significantly increases", and said there would be an update regarding this in the first half of 2026.
Ramelius' production will remain steady at about 200,000 ounces per year until FY29, the company said, when production from the Rebecca-Roe deposit started.
The Never Never deposit was expected to transition into commercial production in FY27.
