Ramelius Resources Limited (ASX: RMS) ('Ramelius', 'the Company') is pleased to provide an update to its Mine Plan from its portfolio of assets located in Western Australia.
The Edna May Stage 3 Pre-Feasibility Study will continue until 31 December 2021.
With planned drilling in the northern (Golden Point) area and recent market fluctuations affecting a number of study inputs, more time is required to appropriately finalise mineable resources, capital and operating costs. Scoping Study work at Mt Magnet has identified the opportunity to bring forward the Galaxy underground, given its potential to commence earlier than the Eridanus underground, which requires the Stage 2 open pit to be completed in FY24 before development can commence.
The Vivien mine has been extended by another two years, with a further year of underground mining before an open pit is planned to mine the crown pillar on the north end of the deposit. Furthermore, a comprehensive underground diamond drilling programme is underway that will look to add further life to the underground mine that has been in operation since 2015.
The high-grade Penny underground remains on track for ore production commencing at the start of FY23, with FY22 used to complete surface and underground development work.
Ramelius Managing Director, Mark Zeptner, today said, 'Once again, to be able to increase the size of the Mine Plan to 1.84Moz, following another a record production year in FY21, is a very pleasing result for Ramelius. It is a further testament to the work done by all our team that we can articulate a longer term plan with production scale, strong margins and an achievable approach to reserve replacement that gives us added confidence going forward
Discussion on the Mine Plan
The Mine Plan shows a solid level of production over a total of nine years, targeting a 250,000oz p.a. level through the two production centres. During this timeframe both processing facilities run at maximum capacity (ore type dependent in the case of Tampia through Edna May). This nine year profile includes a two year tail where nearly 200,000oz is produced, largely from the processing of low grade stockpiles at both sites. The main body of the plan is for seven years: The first four years remain the core of this plan with production expected to exceed 250,000oz in each year.
Production during these four years comes from the mainstay open pits and underground mines (Eridanus, Vivien, Shannon and Hill 60) but the benefit of the investments made by Ramelius over the past 3 years really come home, with a huge contribution over the four years from Marda & Tampia (main feed for Edna May) and Penny - in total, nearly 50% of the four year production profile comes from these 3 assets. This part of the plan also sees the introduction of some new development projects (e.g. Edna May Stg 3, Galaxy UG, Eridanus UG) that will provide the backbone of the next phase of the plan. It is envisaged that extensional exploration success, as has been delivered in the past, on existing projects will provide the high-grade uplift to the lower grade base-lode feed in the years from FY26 and beyond, ideally achieving production rates similar to the 250,000oz p.a. target. The Edna May Stage 3 Pre-Feasibility Study will be ongoing until 31 December 2021. With planned drilling in the northern (Golden Point) area and recent market fluctuations affecting a number of study inputs, more time is required to appropriately finalise mineable resources, capital and operating costs. At this stage, and for the purposes of this Mine Plan update, the Scoping Study results are included, although due to the scale of the project and associated capital investment decision, it is itemised separately. The Edna May Stage 3 project is very sensitive to gold price, grade and operating costs, particularly mining and development costs. A final strategic decision on Stage 3 will be made once the required Pre-Feasibility Study is complete and a final risk assessment is carried out prior to the financial investment decision.
Penny - One of the Lowest Cost Mines
PRODUCTION GROWTH PROFILE - FY15 TO FY22
Up until the FY21 year the AISC per ounce varied no more than 2.5% from one year to the next. The cost pressures felt in FY21 due, in part, to the impact of the COVID-19 pandemic, commodity price increases and the flow on effect to the availability and cost of labour in the mining industry, put upward pressure on our AISC. Despite a slightly higher cost profile looking forwards into FY22, with the current strong gold price and an improving price from the hedge book, we expect margins to be broadly maintained.
COMPARISON TO JUNE 2020 MINE PLAN
Comparing the new Mine Plan with the previous one published in June 20201 shows both a longer mine life and production at a higher annual rate, leading to a 27% increase in total ounces. Indeed, when the June 2020 Mine Plan was completed this time last year, the total forward looking production forecast was 1.45Moz.
The key drivers of this positive change are the inclusion of the Edna May Stage 3 open pit, the new Galaxy underground and extensions at the Shannon/Hill 60 Underground at Mt Magnet. Incremental extensions, at a number of locations including the likes of Vivien, have been the 'quiet achiever' at Ramelius providing a significant cumulative effect. The only reduction is from the conservative removal of the Tampia cut-back until the performance of the orebody in the current phase of mining can me be more fully understood. This may well be added back in later.
Contact:
Tim Manners
Tel: + 61 8 9202 1127
RAMELIUS RESOURCES LIMITED 
