Solid quarter for Saracen, Ramelius

Junior gold miners Ramelius Resources and Saracen Mineral Holdings have posted solid quarters, with Ramelius achieving its production targets for a 12^th consecutive quarter.

Ramelius produced 31,367 ounces of gold in the December quarter, however as that was at the lower end of its 31,000-35,000oz guidance, the company expects unit costs to be higher than its estimate of $1,100/oz.

Cash and gold and hand increased to $95 million, up from $88.7 million in the September quarter, despite spending $7.4 million on capital development during the three months.

“Effectively three years of achieving production guidance is an excellent performance by the operations team, which has no doubt provided a reliable foundation for the company going forward,” Ramelius managing director Mark Zeptner said.

“Ramelius has successfully completed Kathleen Valley and commenced both Blackmans and Water Tank Hill during the quarter, and we continue the discipline of delivering into our lowest priced forward gold sales as they become due.

“On the exploration front, in line with our $15 million budget this year there has been a noticeable ramp up of activity at both Mt Magnet and Vivien, which will continue until at least the end of June.”

Meanwhile, Saracen posted a record quarterly gold production of 66,222oz for the December quarter, to boost its six-month result to a record production of 127,692oz.

The company said it was on track to achieve its goal of doubling its production rate to 300,000oz per annum by the June quarter.

Saracen grew cash and gold on hand to $43.9 million in the quarter, despite spending $14.6 million on exploration and growth needs.

Managing director Raleigh Finlayson said cash flow would be boosted in the coming quarters by increasing production and decreasing all-in sustaining costs.

“Saracen’s strategy to double production and undertake aggressive exploration using internal cash flow is now paying strong dividends, cementing the company’s status as an Australian mid-tier gold producer,” he said.

Saracen shares were 3.6 per cent higher to $1.14 each, while Ramelius shares were 4.7 per cent lower to 60 cents each, at 11am.