Ramelius Resources has delivered its first ore from the Never Never deposit to the Mt Magnet plant, marking a key step in its growth strategy, while also closing out its FY27 gold hedge book to increase exposure to rising gold prices.
- First ore from Never Never deposit delivered to Mt Magnet processing plant
- Ore blending strategy to introduce higher-grade stockpiles from June 2026 quarter
- Never Never project remains on budget and schedule with strong resource base
- Closure of FY27 gold forward contracts increases exposure to spot gold price
- Hedge closure cost of A$28.4 million to be recognized in FY26 financial results
A Significant Operational Milestone
Ramelius Resources Limited (ASX: RMS) has announced a pivotal achievement in its expansion plans with the delivery of the first ore from the Never Never deposit at the Dalgaranga Gold Project to its Mt Magnet processing plant. This milestone, reached within 202 days of the Spartan Resources merger in July 2025, underscores Ramelius's commitment to its 5-Year Growth Pathway aimed at boosting production capacity.
Managing Director Mark Zeptner highlighted the collaborative effort behind this success, noting the support from local authorities and contractors. The company envisions ramping up Mt Magnet’s annual production to 380,000 ounces, contributing to its broader goal of becoming a 500,000-ounce producer by fiscal year 2030.
Ore Processing Strategy and Resource Confidence
Initial haulage involved 31,000 tonnes of development ore grading 3.6 grams per tonne, equating to approximately 3,600 ounces of gold. Ramelius plans to blend this lower-grade ore with other Mt Magnet sources starting March 2026, with higher-grade stockpiles to be introduced in the June quarter after fine-tuning the processing plant.
Recent infill drilling results have reinforced confidence in the geological model and grade estimates, supporting the company’s resource assumptions. The Never Never project boasts an updated mineral resource of 7.5 million tonnes at 8.8 grams per tonne for 2.1 million ounces, alongside a maiden ore reserve of 7 million tonnes at 7.3 grams per tonne for 1.6 million ounces. The mine plan targets 1.9 million ounces over an 11-year life, with an all-in sustaining cost of A$1,128 per ounce, positioning the project as a robust contributor to Ramelius’s portfolio.
Strategic Financial Moves: Hedge Book Closure
In a notable financial decision, Ramelius has elected to close out its FY27 gold forward contract hedge book, pre-delivering June 2026 quarter contracts in the current March quarter. This move, which will incur a one-off expense of A$28.4 million recognized in the FY26 financial results, eliminates all forward contracts by the end of March 2026.
The closure increases Ramelius’s exposure to the spot gold price, which has averaged around A$7,000 per ounce in February. While this strategy introduces greater revenue volatility, it positions the company to benefit directly from any upward movements in gold prices, reflecting confidence in the market outlook.
Looking Ahead
With the Never Never project progressing on schedule and financial strategies aligning with market conditions, Ramelius is poised for a transformative phase. The company’s ability to integrate new ore sources and manage its hedge book dynamically will be critical as it pursues its ambitious production targets.
Bottom Line?
Ramelius’s milestone delivery and hedge closure set the stage for a more exposed but potentially more rewarding gold production profile.
Questions in the middle?
- How will the blending of lower and higher-grade ores affect Mt Magnet’s processing efficiency and output?
- What impact will the hedge book closure have on Ramelius’s earnings volatility amid fluctuating gold prices?
- Can ongoing drilling and exploration further upgrade the confidence in Never Never’s resource estimates?