Ramelius Resources reported solid March quarter gold production with higher costs driven by earlier commercial production at Dalgaranga, rising diesel prices, and increased royalties. The Mt Magnet plant upgrade advances while exploration highlights support future growth.
- March quarter gold production of 38,093 ounces at A$2,211/oz AISC
- FY26 production guidance steady at 185,000–205,000 ounces
- AISC guidance raised to A$1,900–2,050/oz due to cost reclassification and inflation
- Mt Magnet plant upgrade Stage 1 contracted, FEED underway for Stage 2
- Completed A$110.2 million share buybacks, interim dividend of A$0.03 per share declared
Production Holds Steady Despite Weather and Operational Challenges
Ramelius Resources (ASX:RMS) delivered 38,093 ounces of gold in the March 2026 quarter at an all-in sustaining cost (AISC) of A$2,211 per ounce, down from previous quarters largely due to a planned six-day mill shutdown and haul road closures caused by Cyclone Narelle. Year-to-date production stands at 138,716 ounces with an AISC of A$1,987/oz, keeping the company on track to meet its full-year guidance of 185,000 to 205,000 ounces.
The company’s cash and gold holdings decreased to A$606.5 million from A$694.3 million in December 2025, reflecting an operating cash flow of A$171.3 million and a free cash flow of A$101.9 million after growth capital and exploration investments. Ramelius remains confident in achieving the midpoint of FY26 production guidance despite these operational headwinds.
Cost Pressures Prompt AISC Guidance Revision
Ramelius raised its FY26 AISC guidance range to A$1,900–2,050/oz from the previous A$1,700–1,900/oz. This upward revision stems from several factors: the Never Never underground mine at Dalgaranga reached commercial production earlier than anticipated, resulting in a reclassification of approximately A$20 million from growth capital to sustaining capital, adding about A$100/oz to costs; diesel prices have surged amid Middle East tensions, increasing costs by around A$4.5 million; and higher gold prices have pushed royalty expenses up by approximately A$8 million.
While the cost classification shift does not affect overall capital expenditure, it impacts reported operating costs and AISC metrics. Diesel price volatility remains a key risk, with Ramelius hedging a portion of its diesel consumption at favourable rates to mitigate further cost escalation.
Mt Magnet Plant Upgrade Advances with Contracting Milestones
The Mt Magnet plant expansion is progressing steadily, with Stage 1 works formally contracted and site mobilisation imminent. The company is advancing a FEED-to-EPC contracting strategy for Stages 2 and 3, aiming to award the EPC contract early in the September 2026 quarter. Long-lead equipment procurement, including a new ball mill, is underway, supported by project management frameworks to control schedule and costs.
This front-end loading of engineering design work has shifted some capital expenditure into FY27, reducing FY26 growth capital guidance for plant expansion to A$90–100 million from an earlier estimate of A$192–212 million, without impacting overall project timing.
Exploration Success Fuels Potential Resource Growth
Exploration drilling continues to yield promising results, particularly at Dalgaranga’s Gilbey’s Underground, where high-grade intercepts suggest potential for a new underground mine. Ramelius has set an exploration target of 2.1 to 4.7 million tonnes at 1.5 to 2.0 g/t for 100,000 to 300,000 ounces of gold at Gilbey’s, though this remains conceptual pending further drilling. Similarly, at the Galaxy underground mine, additional mineralisation beneath existing operations has been identified, with an exploration target of 6.0 to 7.0 million tonnes grading 2.1 to 2.6 g/t for 400,000 to 600,000 ounces. These targets underpin the company’s high-grade exploration strategy, which currently employs 16 rigs across its portfolio.
These drilling results build on the company’s recent Dalgaranga Exploration Update and reinforce the potential to sustain or even grow production beyond FY30.
Corporate Moves Support Shareholder Returns and Financial Flexibility
Ramelius completed A$110.2 million of share buybacks during the quarter, representing 44% of its A$250 million program, one of the largest buyback amounts among Australian gold producers. The company also declared a fully franked interim dividend of A$0.03 per share, exceeding its minimum FY26 dividend guidance.
Financially, Ramelius replaced its previous A$175 million revolving credit facility with an undrawn A$500 million facility, enhancing liquidity and funding flexibility. Gold forward contracts were closed out during the quarter, leaving no outstanding hedges, but zero premium collars and put options remain in place to provide price protection for FY27 and FY28 production.
These corporate developments follow the company’s recent FY26 Production Guidance Confirmation and underscore a focus on balancing growth with shareholder returns.
Safety and Environmental Performance
Safety metrics improved with a reduction in the Total Recordable Injury Frequency Rate (TRIFR) to 11.33, reflecting positive impacts from proactive safety culture initiatives. No significant environmental, heritage, or community incidents were reported during the quarter, maintaining stable operational conditions.
Bottom Line?
RMS faces a balancing act between rising costs and ambitious expansion, with diesel price volatility and exploration outcomes set to influence its near-term trajectory.
Questions in the middle?
- How will ongoing diesel price fluctuations affect Ramelius’s cost structure and margins in FY27?
- Can exploration targets at Gilbey’s and Galaxy convert into resources that materially extend mine life or increase production?
- What impact will the timing shift in Mt Magnet’s capital expenditure have on cash flow and project delivery risks?