Ramelius turns Spartan deal into a 600,000-ounce growth plan

Spartan acquisition begins to show up in production

Ramelius Resources (ASX:RMS) spent FY26 proving that its A$2.8 billion Spartan Resources acquisition could become more than a balance-sheet event. The Never Never underground mine at Dalgaranga entered commercial production in March, three months earlier than expected, helping Ramelius produce 192,182 ounces of gold at an all-in sustaining cost of A$1,983 an ounce.

That production result was within revised guidance and marked the sixth consecutive year in which Ramelius met its production target. The operating performance arrived despite the loss of Edna May production and lower grades in parts of the Mt Magnet blend. Gold sales fell 37% to 190,261 ounces, but the average realised price rose 36% to A$5,400 an ounce, supporting a 74% underlying EBITDA margin and underlying NPAT of A$319.9 million.

The statutory numbers tell a less smooth story. Reported NPAT fell to A$118.8 million from A$474.2 million, after A$133.2 million of Spartan acquisition costs, a A$55.4 million non-cash fair-value adjustment to future Dalgaranga royalties and A$28.4 million to close the remaining FY27 forward gold contracts. Operating cash flow also declined to A$545.6 million, partly reflecting A$179.9 million of income tax payments and the lower production base.

Reserves expand as exploration replaces mined ounces

The strongest strategic figure in the report is the resource base. Mineral Resources increased 17% to 14Moz, while Ore Reserves rose 79% to 4.3Moz at 30 June 2026. The company says FY26 drilling added 1.8Moz at an average discovery cost of A$55 an ounce, the largest single-year increase from drilling on its internal assets.

The reserve lift was driven by the Spartan assets, including a maiden 1.6Moz Ore Reserve for Never Never, a 260koz underground reserve at Roe and resource definition work at Galaxy. This was the same reserve and drilling step previously detailed in the 79% Ore Reserve increase, which also set out Ramelius’ A$90 million to A$110 million FY27 exploration budget.

Not all of the growth has equal geological status. Exploration targets at Galaxy and Gilbey’s Underground remain conceptual and are not Mineral Resources, meaning further drilling and technical work are required before they can support mine planning. Ramelius plans to spend A$90 million to A$110 million on exploration in FY27, targeting about 240,000 metres of drilling.

Mt Magnet expansion carries the production plan

Ramelius’ longer-term plan rests on processing more ore through Mt Magnet. The preferred integration design combines a refurbished 1.3Mtpa circuit for Dalgaranga ore with a new 3Mtpa circuit for Mt Magnet feed, creating an initial capacity of up to 4.3Mtpa and optionality to reach 5Mtpa. The report puts the capital cost of the broader 5Mtpa solution at A$223 million, while the new Circuit 2 had moved into engineering and contracting during the September 2026 quarter.

The plan is designed to support the production ambition outlined in the 600,000-ounce FY30 outlook. Ramelius forecasts FY27 production of 205,000 to 225,000 ounces at an AISC of A$2,150 to A$2,350 an ounce, rising to 560,000-610,000 ounces in FY30 at an AISC of A$2,100-A$2,400 an ounce.

That step-up is substantial relative to FY26, and the annual report itself identifies the central tension: the company has strong financial capacity, but must fund mine development, plant construction, exploration and Rebecca-Roe at the same time. Ramelius ended FY26 with A$649.6 million in cash and gold and an undrawn A$500 million revolving facility, but growth capital and working-capital demands will determine how quickly that cushion is consumed.

Rebecca-Roe and shareholder returns compete for capital

Rebecca-Roe is the second major leg of the expansion. The project has a 1.1Moz Ore Reserve and a DFS forecast of average annual production of about 130,000 ounces at an AISC of A$2,625 an ounce. The board has made a Final Investment Decision subject to remaining approvals, while Roe received its Part V works approval in September 2026. First production is forecast for the December 2028 quarter under the DFS plan.

Ramelius also returned A$255 million to shareholders in FY26 through fully franked dividends and share buy-backs. The company bought back A$141.8 million of shares, or 57% of its announced A$250 million program, and declared a total dividend of 6.0 cents per share. The sale of the Edna May Hub completed for A$300 million, comprising A$210 million cash and A$90 million in Forrestania Resources shares, leaving Ramelius with an approximately 9.6% stake in the buyer.

For shareholders, the next test is less about whether Ramelius has growth assets and more about whether it can build them without losing the operating and capital discipline that produced FY26’s returns. The September quarter kept FY27 guidance intact, but the larger question is whether Never Never ramps up, Mt Magnet expands on budget and Rebecca-Roe advances on schedule while exploration targets convert into reserves rather than remaining attractive possibilities.