Ramelius Resources Ltd (ASX: RMS) this week released a March quarter update, reaffirming that it is likely to hit the midpoint of its full-year guidance.
The analyst team at Shaw and Partners has reviewed the result and maintained its buy recommendation, with a bullish price target for the stock. We'll get to that shortly.
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Production dipping but stockpiles strong
Firstly, let's have a look at what Ramelius announced earlier this week.
The Western Australia-focussed gold miner said it had produced 38,093 ounces of gold for the quarter, which Shaw pointed out in their report, "continues the sequentially falling FY26 production; after 45,600 ounces in Q2 and 55,000 ounces in Q1''.
Ramelius said there had been a planned six-day shutdown of its Mt Magnet mill, and haul road closures due to rainfall associated with Cyclone Narelle, "resulting in significant high-grade mine stockpiles at quarter end''.
The company said it remained on track to hit the midpoint of its forecast production guidance of 185,000 to 205,000 ounces for the full year.
Ramelius said it had executed share buybacks of $110.2 million during the quarter and had cash and gold worth $606.5 million on hand at the end of the quarter.
The company also said its Mt Magnet operations were not currently impacted by diesel supply chain disruptions, with their supply sourced directly from a major global oil company on a long-term contract.
Managing Director Mark Zeptner said of the quarter:
We remain on track to deliver at the mid-point of our FY26 production guidance with significant contributions from Dalgaranga and Cue planned in the June 2026 Quarter. Dalgaranga's first stope in the Never Never orebody was fired ahead of schedule on 13 March 2026 and above grade expectations at above 7 grams per tonne. While still early days, the geological model is reconciling better than expected and our newest mine is off to a fantastic start. Ramelius remains committed to maintaining and growing shareholder returns. With A$110 million in share buybacks during the Quarter, we are executing on another element of our plan to deliver value to shareholders. We look forward to sharing an update on the Dalgaranga exploration program in coming weeks demonstrating the significant potential upside at the Mt Magnet production hub.
Shares looking cheap
The Shaw team has lowered its estimated FY26 production forecast for Ramelius to 194,000 ounces, down from 201,000, and has increased their estimated all-in sustaining cost of production from $1825 per ounce to $1960.
They said they continued to have a positive view on gold, "which Ramelius is exposed to via its multi-year production growth''.
Shaw has a price target of $6.50 on the ASX resources shares compared with the current price of $3.95. The company is valued at $7.78 billion.
