Ramelius boosts sales, profit

Murchison-focused gold miner Ramelius Resources expects to report a boost in net profit to $28.7 million for the six months to December, on the back of increased sales.

Ramelius said in a statement today that its gross margin generated from operations in the first half of the 2016 financial year was expected to reflect a $25.5 million surplus, up 231 per cent on the previous corresponding period.

“The company has forward sold an additional 60,000 ounces of gold at a flat forward price of $1,600 per ounce,” the Adelaide-based gold miner said.

“The gold price achieved enables Ramelius to secure a solid margin at a time of high price volatility.

“Total forward gold sales now represents about 50 per cent of production, compared to 40 per cent previously, and extends over two years to December 2017.”

Managing director Mark Zeptner said the half-year result support the company’s claims of continued improvement, with a steadily performing Mt Magnet gold mine in the Murchison region combining with high margin production from the Kathleen Valley operation near Leinster.

“It is also particularly pleasing that the company has been able to complete the upfront capital development of the Vivien project both without drawing down on the finance facility and increasing our cash balance all the while,” Mr Zeptner said.

“The additional forward sales are in line with our risk management strategy by delivering a portion of cashflow certainty whilst retaining exposure to gold price upside.

“Locking in a $1,600/oz forward sales price secures a robust operating margin at a level that has only been seen a handful of times over the past few years.”

Ramelius shares closed 7.3 per cent higher to 36.5 cents each.