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RAMELIUS RESOURCES LIMITED — Interim / Quarterly Report 2021
Feb 22, 2021
65718_rns_2021-02-22_a4fc805d-632e-4849-8e18-e29cf79cc685.pdf
Interim / Quarterly Report
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23 February 2021
ISSUED CAPITAL
Ordinary Shares: 814M
DIRECTORS
NON-EXECUTIVE CHAIR:
Bob Vassie
MANAGING DIRECTOR:
Mark Zeptner
NON-EXECUTIVE DIRECTORS:
Michael Bohm
David Southam
Natalia Streltsova
COMPANY SECRETARY:
Richard Jones
www.rameliusresources.com.au
[email protected]
RAMELIUS RESOURCES LIMITED
Registered Office
Level 1, 130 Royal Street
East Perth, WA 6004
Tel +61 8 9202 1127
PO Box 6070
East Perth, WA 6892
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23 February 2021
APPENDIX 4D: HALF YEAR REPORT FOR THE PERIOD ENDED 31 DECEMBER 2020
Results for announcement to the market
Current reporting period: Half year ended 31 December 2020
Previous corresponding reporting period: Half year ended 31 December 2019
| 2020 | 2019 | ||
|---|---|---|---|
| Key Information | A$’000 | A$’000 | |
| Revenue from ordinary activities | up 116% | 342,226 | 158,451 |
| Earnings before Interest, Tax, Depreciation & Amortisation (EBITDA) |
up 193% | 192,840 | 65,910 |
| Earnings before Interest and Tax (EBIT) | Up 288% | 118,297 | 30,463 |
| Net profit before tax | up 294% | 116,664 | 29,621 |
| Net profit after tax | up 297% | 81,320 | 20,494 |
| Net profit after tax attributable to members | up 297% | 81,320 | 20,494 |
Dividend information
Dividends recommended but not yet paid
There were no dividends recommended but not yet paid for the half year ended 31 December 2020.
Dividends paid
On 2 October 2020, a final dividend for the year ended 30 June 2020 of 2 cent per fully paid ordinary share was paid. The dividend payment totalled $16,169,590.
Financial results
The following Appendix 4D reporting requirements are found within this half year financial report which has been reviewed by Deloitte Touche Tohmatsu:
| Requirement | Title | Reference |
|---|---|---|
| Review of results | Directors’ report | Page 8 |
| A statement of comprehensive income | Income statement | Page 16 |
| A statement of financial position | Balance sheet | Page 17 |
| A statement of retained earnings | Statement of changes in equity | Page 18 |
| A statement of cash flows | Statement of cash flows | Page 19 |
| 31 December | 31 December | |
|---|---|---|
| Net tangible assets per ordinary share | 2020 | 2019 |
| A$ | A$ | |
| Net tangible asset backing per ordinary share | 0.72 | 0.44 |
| 31 December | 31 December | |
| Earnings per share | 2020 | 2019 |
| A$ | A$ | |
| Basic earnings per share | 10.06 | 3.11 |
| Diluted earnings per share | 9.93 | 3.06 |
Changes in controlled entities
During the year the group disposed of the following entities.
| Date | Type | Name |
|---|---|---|
| 24 September 2020 | Disposal | Red Dirt Mining Pty Limited |
Associates and joint venture entities
The group has the following direct interests in unincorporated joint operations:
| Joint operation project | Joint operation partner | Principal activity | 31 December 2020 |
|---|---|---|---|
| Nulla South | Chalice Gold Mines Limited | Gold Exploration | 0%* |
| Gibb Rock | Chalice Gold Mines Limited | Gold Exploration | 0%* |
| Coogee Farm-out | Unlisted entity | Gold Exploration | Diluting90% |
| Parker Dome | Unlisted entity | Gold Exploration | 0%* |
| Mt Finnerty | Unlisted entity | Gold Exploration | 0%* |
| Jupiter | Kinetic Gold# | Gold Exploration | 0%* |
| Tampia Hill | Tampiagold Pty Ltd & Goldoro Pty Ltd^ | Mine Development | 90% |
- Ramelius earning in.
Kinetic Gold is a subsidiary of Renaissance Gold Inc.
^ The Tampia Hill joint venture was terminated on 3 February 2021 upon the acquisition of the remaining 10% project interest by Ramelius. Ramelius now owns 100% of the Tampia Gold Project.
Audit
This report is based on financial statements which have been subject to a review by Deloitte Touche Tohmatsu.
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2021 Half year report
For the six months ended 31 December 2020
It is recommended that the 2021 half year report is read in conjunction with the 30 June 2020 annual financial report of Ramelius Resources Limited together with any public announcements made by Ramelius Resources Limited during the half year ended 31 December 2020 in accordance with the continuous disclosure obligations arising under the Corporation Act 2001.
RAMELIUS RESOURCES LIMITED ABN 51 001 717 540
About this report
This half year report is a summary of Ramelius and its subsidiary companies’ operations and financial position as at 31 December 2020 and performance for the half year ended on that date.
In this report references to ‘Ramelius’, ‘the company’, and ‘the group’ refer to Ramelius Resources Limited (ABN 51 001 717 540) and its subsidiary companies’, unless otherwise stated.
References in this report to the ‘half year’ are to the financial period 1 July 2020 to 31 December 2020 unless otherwise stated. The prior corresponding period is the half year ended 31 December 2019.
All dollar figures are expressed in Australian dollars (AUD) unless otherwise stated.
| Table of contents | Page |
|---|---|
| Directors’ report | 2 |
| - Operations review |
3 |
| - Financial review |
8 |
| - Auditor’s independence declaration |
14 |
| Half year financial report | 15 |
| Directors’ declaration | 28 |
| Independent auditor’s review report | 29 |
| Corporate directory | 31 |
Ramelius Resources Limited 2021 Half year report
Page 1
Directors’ report
Your directors present their report on Ramelius Resources Limited for the half year ended 31 December 2020.
Directors
Except as otherwise stated below, the directors in office during half year reporting period and as at the date of this report are shown below.
Bob Vassie[1] Kevin Lines[2] Mark Zeptner Michael Bohm[3] David Southam Natalia Streltsova
1 Bob Vassie was appointed to the Board and as Non Executive Chair effective 1 January 2021.
2 Kevin Lines was Chair from the beginning of the period until his retirement on 30 September 2020.
3 Mike Bohm was appointed acting Chair for the period 1 October 2020 until 31 December 2020.
Key highlights for the half year
Board approval to commence development of the Penny Gold Project
On 9 November 2020 Ramelius released the results of the Penny Feasibility Study and consequently the Board’s approval to commence project development. As a result of the compelling financial outcomes from the Penny Feasibility Study, the Board also approved a Decision to Mine which should result in mine development commencing in the June 2021 Quarter, slightly earlier than contemplated by the Prefeasibility Study.
The project is located approximately 20km south of Youanmi or 170km by road south east of the Mt Magnet mining and processing operations and approximately 500km north-east of Perth in Western Australia. Ore production is planned to be processed through the Mt Magnet processing plant as part of an overall feed blend. No capital modifications to the processing facility are required in order to process the Penny ore.
COVID-19
Ramelius maintains certain procedures, related to physical distancing and pre-commute screening. The company continues to apply new restrictions as they are introduced, wearing of clinical masks on aircraft and in the workplace where required, as well as carrying out temperature testing and screening processes prior to commuting to sites. Some of our staff are currently required to undertake COVID19 testing where third party transport or accommodation facilities are being used.
There were no other significant changes in the state of affairs of the group that occurred during the half year not otherwise disclosed in this report or the financial statements.
Dividends
Dividends paid to members during the half year were as follows:
| 31 Dec 2020 $A 31 Dec 2019 **$A ** |
|
|---|---|
| Final dividend for the year ended 30 June 2020 of 2 cent (2019: 1 cent) per fully paid ordinary share paid on 2 October 2020 |
16,170 6,579 |
Table 1 : Dividends paid during the half year
Events since the end of the reporting period
Purchase of the remaining 10% minority interest in the Tampia Gold Project
On 3 February 2021 Ramelius completed the acquisition of the remaining 10% minority interest in the Tampia Gold Project that was previously held by Tampiagold Pty Ltd and Goldoro Pty Ltd. Ramelius now owns 100% of the Tampia Gold Project and will operate it independently. The consideration for the acquisition of the minority interest comprised:
-
$1 million cash (paid in November 2020);
-
$2 million cash (paid in February 2021);
-
5 million Ramelius shares issued under Listing Rule 7.1 (issued in February 2021); and
-
2% royalty on any gold production from the Tampia Gold Project above 185,539 ounces.
Ramelius Resources Limited 2021 Half year report
Page 2
Directors’ report
Purchase of Tampia Gold Project freehold land
On 25 January 2021 Ramelius reached an agreement to purchase the primary freehold land associated with the Tampia Gold Project for $6 million. The consideration is to be paid over two payments with $2.3 million paid in January 2021 and the balance of $3.7 million to be paid at settlement, which is anticipated to be 31 March 2021.
The agreement allows for immediate access to the Tampia Gold Project area for site preparations which is in line with existing production schedules. Whilst access to the primary freehold land associated with the Tampia Gold Project has been limited during the half year period, significant project development work has advanced including camp construction and Edna May mill modifications.
COVID-19
On 31 January 2021, the West Australian Government announced lockdown measures as a result of COVID-19. Measures included a five day lockdown of the Perth metropolitan areas along with travel restrictions between Perth and other areas of Western Australia. Ramelius has not seen a significant operational or financial impact as a result of these lockdown measures. The outbreak and response of governments in dealing with COVID-19 continues to evolve and can at times be uncertain. Ramelius continues to monitor these developments and respond accordingly. At the date of this report the bulk of the travel restrictions have been removed.
There were no other matters or circumstances that have arisen since 31 December 2020 that have, or may, significantly affect the group’s operations, results, or state of affairs, or may do so in the future.
Operations review
Overview
Ramelius is an established ASX 200 gold production and exploration company. Following record production of 230,426 ounces in the 2020 financial year Ramelius has set guidance for the 2021 financial year at 260,000 – 280,000 ounces which, if achieved, will be another record year for the company. Furthermore, a life of mine plan was released on 30 June 2020 which detailed annual gold production averaging over 250,000 ounces out to the 2025 financial year. This represents a 25% increase in the average annual production and an extension of two years on the prior year life of mine plan. Total production over the life of mine plan was 1.45M oz.
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Figure 1 : Ramelius’ operations & development project locations
Ramelius Resources Limited 2021 Half year report
Page 3
Directors’ report
Ramelius has continued on from the strong 2020 financial year reporting a 288% increase in the earnings before interest and tax ( EBIT ) compared to the prior corresponding period. The reported EBIT for the six months ended 31 December 2020 was $118.3 million (2019: $30.5 million). This exceptional performance has been driven by a 25% improvement in realised gold prices and a 39% increase in milled grade across the group, which combined with higher throughput resulted in a 57% increase in gold production.
It is also pleasing to report this growth has been achieved with only a marginal increase in the operating cost per ounce, which increased 4% on the prior corresponding period. Total expenditure increased due to higher material movement and higher throughput than the prior corresponding period, however the increased grade ensured the costs per ounce were maintained at industry competitive levels.
During the 2021 half year the company produced a record 144,240 ounces (2019: 92,084 ounces) from its Mt Magnet and Edna May production centres at an All in Sustaining Cost ( AISC ) of $1,261 per ounce (2019: $1,240 per ounce). Sales for the half year totalled 147,836 ounces (2019: 85,692 ounces) at an average realised gold price of $2,312 per ounce (2019: $1,844 per ounce) generating a strong AISC margin of $1,051 per ounce (2019: $604 per ounce). The margin of the sales price over the All in Sustaining Cost has increased from 28% in 2016 to 45% in this half year, as demonstrated in the figure below.
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Figure 2 : AISC per ounce and realised gold price from June 2016 to December 2021
| Operational summary Unit |
Mt Magnet1 Edna May2 2020 Group 2019 Group Change Change % |
Mt Magnet1 Edna May2 2020 Group 2019 Group Change Change % |
|---|---|---|
| Open pit | ||
Material moved k bcm |
2,987 2,717 5,704 |
4,413 1,291 + 29% |
| High grade ore mined kt |
277 1,044 1,321 |
1,278 43 + 3% |
| Grade g/t |
2.25 1.34 1.53 |
1.30 0.23 + 18% |
| Contained gold Oz |
20,007 44,863 64,870 |
53,479 11,391 + 21% |
| Underground | ||
| High grade ore mined kt |
347 129 476 |
249 227 + 91% |
| Grade g/t |
4.88 4.07 4.66 |
4.78 (0.12) - 2% |
| Contained gold oz |
54,473 16,936 71,409 |
38,247 33,162 + 87% |
| Total ore mined kt |
624 1,173 1,797 |
1,527 270 + 18% |
Ramelius Resources Limited 2021 Half year report
Page 4
Directors’ report
| Operational summary (continued) Unit |
Mt Magnet1 Edna May2 2020 Group 2019 Group Change Change % |
Mt Magnet1 Edna May2 2020 Group 2019 Group Change Change % |
|---|---|---|
| Mill production | ||
| Tonnes milled kt |
956 1,410 2,366 |
2,109 257 + 12% |
| Grade g/t |
2.97 1.39 2.03 |
1.46 0.57 + 39% |
| Contained gold oz |
91,309 62,976 154,285 |
98,766 55,519 + 56% |
| Recovery % |
96.5 93.9 95.4 |
94.4 1.0 + 1% |
| Recovered gold oz |
88,078 59,109 147,187 |
93,250 53,937 + 58% |
| Gold poured oz |
84,119 60,121 144,240 |
92,084 52,156 + 57% |
| Gold sold oz |
87,898 59,938 147,836 |
85,692 62,144 + 73% |
Table 2 : Mine operations performance for the 2020 half year
1 In the above table and throughout this report Mt Magnet incorporates the high grade Vivien underground ore which is processed through the Mt Magnet processing plant.
2 In the above table and throughout this report Edna May incorporates the Marda ore which will be processed through the Edna May processing plant.
Mt Magnet
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Figure 3 : Mt Magnet key mining & exploration areas
Ramelius Resources Limited 2021 Half year report
Page 5
Directors’ report
Mining
Operations at Mt Magnet continued on a multi pit / underground basis throughout the 2021 half year with mining occurring at two open pit and four underground projects. A summary of the main projects for the half year is provided below:
| Area | **Type ** | Operational commentary |
|---|---|---|
| Eridanus Open Pit The large Eridanus open pit was the main source of ore feed for Mt Magnet for the half year making up 31% of the mill feed. A total of 293k tonnes of ore was milled at a grade of 1.52 g/t and a recovery of 93.8% for 13,243 ounces of recovered gold. Mining operations at Eridanus continued during the half year with the focus being primarily on the waste removal for the Eridanus Stage 2 cutback. A total of 199k tonnes of high grade ore was mined at a grade of 1.11 g/t for 7,105 ounces of contained gold. At 31 December 2020 there were 1,263k tonnes of high grade Eridanus ore stockpiled awaiting processing. |
||
| Stellar Open Pit Mining of the high grade ore zone was completed in September 2020. A total of 104k tonnes were milled at a grade of 4.17 g/t and recovery of 95.3% for recovered gold of 13,228 ounces. |
||
| Milky Way Open Pit Mining at Milky Way was completed in the 2020 financial year. A total of 24k tonnes was milled from stockpiles at a grade of 1.19 g/t and recovery of 94.5% for recovered gold of 878 ounces. At the period end there remained just over 404k tonnes of high grade Milky Way ore stockpiled. The higher grade Eridanus ore was preferentially treated during the period. |
||
| Vegas Open Pit Mining at Vegas was completed in the 2020 financial year. A total of 150k tonnes was milled from stockpiles at a grade of 1.23g/t and a recovery of 94.8% for recovered gold of 5,648 ounces. Just under 42k tonnes remained stockpiled at period end for selective processing in the second half of the 2021 financial year. |
||
| Hill 60 Underground Mining at the Hill 60 underground continued during the half year with 126kt of ore being milled at a grade of 2.09 g/t and a recovery of 97.5% for 8,299 ounces of recovered gold. Stope production is expected to ramp up and continue throughout the 2021 financial year. |
||
| Shannon Underground Shannon underground production continued steadily and is generating excellent high grade ore. Mining at the Shannon underground enabled 110kt of ore to be milled at a grade of 7.85 g/t and a recovery of 93.8% for 27,155 ounces of recovered gold. Underground drilling has extended the Mineral Resource at least four levels below the original Ore Reserve. While the quartz lode narrows, some exceptional grades are being seen and several splay veins are providing additional parallel stope zones. Further infill and extensional drilling is planned. Development for the period at Shannon totalled 1,519 metres. |
||
| Water Tank Hill Underground Mining at Water Tank Hill was completed in September 2020. A total of 30k tonnes were milled at a grade of 3.15 g/t and recovery of 97.2% for recovered gold of 2,955 ounces. |
Ramelius Resources Limited 2021 Half year report
Page 6
Directors’ report
| Area | **Type ** | Operational commentary |
|---|---|---|
| Vivien Underground Total high grade mill production from Vivien was 104k tonnes at a grade of 5.06 g/t and recovery of 97.4% for recovered gold of 16,505. Mining operations at Vivien have continued as planned with the end of mine life still scheduled for early in the 2022 financial year. |
Milling
| Milling | Milling | Milling |
|---|---|---|
| Dec 20 Dec 19 Change (%) |
||
| Mill production | ||
| Tonnes milled Kt |
956 | 1,018 - 6 % |
| Grade g/t |
2.97 | 2.17 + 37 % |
| Contained gold Oz |
91,309 | 70,934 + 29 % |
Recovery % |
96.5 | 95.7 + 1 % |
Recovered gold Oz |
88,078 | 67,873 + 30 % |
Gold poured Oz |
84,119 | 66,987 + 26 % |
| Gold sold Oz |
87,898 | 60,456 + 45 % |
Table 3 : Mt Magnet mill production for the 2021 half year
A total of 956k tonnes were processed at the Mt Magnet mill during the half year which is 6% lower than the prior corresponding period. Whilst current period throughput decreased by 6% due to the hardness of the ore, the grade of the ore was 37% higher resulting in a 30% increase in the recovered gold when compared to the prior corresponding period.
The grades at Mt Magnet increased due to a 96% increase in underground high grade ore feed from Vivien, Hill 60 and Shannon. Underground mines made up 39% of the ore feed during the period compared to 19% for the prior corresponding period. The open pit ore feed was primarily sourced from Eridanus during the period.
Edna May
Mining
Mining operations at Edna May focused on the underground mine, Greenfinch open pit, and Marda Gold Project (open pit). A summary of these projects for the year is provided below:
| Area | **Type ** | Operational commentary |
|---|---|---|
| Edna May Underground Underground A total of 134k tonnes of high grade ore was milled at a grade of 3.93 g/t and recovery of 93.8% for 15,857 ounces of contained gold. Mining transitioned from the development phase into stope production in the second half of the 2020 calendar year. |
||
| Greenfinch Open Pit The Greenfinch open pit served as the major source of ore for the Edna May processing facility for the period. A total of 538k tonnes were milled at a grade of 1.14 g/t and recovery of 93.8% for recovered gold of 18,530 ounces. |
||
| Marda Open Pit Mining continued at Marda with mill feed sourced from four separate pits during the period. A total of 314k tonnes were milled at a grade of 1.89 g/t and recovery of 93.9% for recovered gold of 17,898 ounces. At 31 December 2020 a total of 298k tonnes of ore remained stockpiled at the mine site awaiting haulage and processing. |
Ramelius Resources Limited 2021 Half year report
Page 7
Directors’ report
Milling
| Milling | ||
|---|---|---|
| Dec 20 Dec 19 Change (%) |
||
| Mill production | ||
| Tonnes milled Kt |
1,410 | 1,091 + 29 % |
| Grade g/t |
1.39 | 0.79 + 75 % |
| Contained gold Oz |
62,976 | 27,832 + 126 % |
| Recovery % |
93.9 | 91.2 + 3 % |
Recovered gold Oz |
59,109 | 25,377 + 133 % |
| Gold poured Oz |
60,121 | 25,097 + 140 % |
| Gold sold Oz |
59,938 | 25,236 +138 % |
Table 4 : Edna May mill production for the 2021 half year
Throughput for the period, when compared to the prior corresponding period, was up 29% with the return to continuous milling from March 2020 after some early start up delays at Greenfinch in the prior corresponding period. Ore feed was predominantly sourced from the Greenfinch, Marda and Edna May underground mines. Mill grades were up 75% resulting in a 133% increase in recovered gold when compared to the prior corresponding period.
The significant increase in milled grades has been due to the main source of ore feed transitioning from low grade stockpiles to the higher grade open pit ore from Greenfinch and Marda. In the prior corresponding period 95% of ore feed was sourced from the low grade stockpiles whilst in the current period this dropped to 30% with Greenfinch and Marda making up 60% of the ore feed. The balance of the ore feed was made up of Edna May underground material.
Financial review
| Financial review | ||
|---|---|---|
| Financialperformance | Mt Magnet $M Edna May $M Corp & other $M Group Dec 20 $M Group Dec 19 $M Change $M Change % |
|
| Revenue Cash costs of sales |
202.6 139.6 - 342.2 |
158.4 183.8 + 116 % (105.9) (33.6) + 32 % |
| (65.5) (74.0) - (139.5) |
||
| Gross margin excluding “non-cash” items Amortisation and depreciation Inventorymovements |
137.1 65.6 - 202.7 |
52.5 150.2 + 286 % (35.3) (39.0) + 110 % 19.1 (23.4) - 123 % |
| (39.7) (34.6) - (74.3) |
||
| (9.0) 4.7 - (4.3) |
||
| Gross profit | 88.4 35.7 - 124.1 |
36.3 87.8 + 242 % |
| Earnings before interest & tax (EBIT) Net finance costs |
88.4 35.7 (5.8) 118.3 |
30.5 87.8 + 288 % (0.9) (0.7) + 78 % |
| - - (1.6) (1.6) |
||
| Profit /(loss) before income tax | 88.4 35.7 (7.4) 116.7 |
29.6 87.1 + 294 % |
| Income tax expense | - - (35.3) (35.3) |
(9.1) (26.2) + 288 % |
| Profit / (loss) for the year from continuing operations |
88.4 35.7 (42.7) 81.3 |
20.5 60.8 + 297 % |
Table 5 : 2021 half year financial performance
Ramelius Resources Limited 2021 Half year report
Page 8
Directors’ report
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Figure 4 : Revenue reconciliation between 2020 and 2019
Revenue
Revenue for the half year ended 31 December 2020 increased by 116% to $342.2 million compared to $158.4 million for the half year ended 31 December 2019. This excellent result was achieved with an increase in gold sales of 73% coupled with a 25% increase in average realised gold price:
-
Mt Magnet gold sales increased by 45% or 27,442 ounces due to higher grades as discussed within this report.
-
Edna May gold sales increased by 138% or 34,702 ounces due to higher tonnages milled and higher grades as discussed within this report.
-
The realised gold price was $2,312 per ounce, a 25% increase on the prior corresponding period. Sales were a mix of spot and forward sales with the average spot price being $2,590 per ounce and the average price of deliveries into the hedge book of $2,042 per ounce.
-
The average price of the hedge book as at 31 December 2020 increased 7% over the six month period to $2,288 per ounce (June 2020: $2,135 per ounce).
Earnings before interest & tax (EBIT)
The EBIT for the half year ended 31 December 2020 was $118.3 million compared to $30.5 million for the prior corresponding period, representing a 288% increase. This record first half result was achieved through an increase in milled grades, continued focus on maintaining controls over costs across the business, and a higher A$ gold prices.
Total operating costs (including depreciation and amortisation) increased from $122.1 million to $218.2 million due to the significant increase in open pit movement and ore processing over the prior corresponding period. This increase was also in part due to the higher proportion of underground material in the overall portfolio, which, although is a higher cost source of ore, it generally provides for a better operating margin per ounce due to higher grades.
On a per ounce basis the total operating costs increased just 3.5% to $1,475/oz sold (2019: $1,425). With the continued increase in realised gold price, the EBIT margin has almost doubled from the prior corresponding period to 35% (2019: 19%).
Ramelius Resources Limited 2021 Half year report
Page 9
Directors’ report
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Figure 5 : Reconciliation of movement in EBIT from 2019 to 2020
Mt Magnet delivered an EBIT of $88.4 million for the half year ended 31 December 2020 which was up from the $29.3 million EBIT for the prior corresponding period with the EBIT margin increasing to 44% (2019: 26%). Profitability at Mt Magnet was up on 2019 due to higher grades and higher realised gold prices.
Total operating costs at Mt Magnet increased 38% to $114.2 million. This increase in costs was due to two main factors. Firstly, underground ore made up 39% of the ore feed compared to 19% in the prior corresponding period. Underground ore is typically more expensive to mine, on a per tonne basis, than open pit ore, however grades are usually significantly higher. Secondly, ore was sourced from the Stellar open pit mine in the period. The Stellar open pit mine had a higher cost per tonne than would typically be seen for an open pit mine, however grades were significantly higher with the milled grade for Stellar being 4.17 g/t (compared to 1.37 g/t for other Mt Magnet open pit mines in the period). Pleasingly, due to the above considerations, the operating cost per ounce at Mt Magnet decreased 5%.
Edna May delivered an EBIT of $35.7 million for the half year ended 31 December 2020 compared to $7.0 million for the prior corresponding period with the EBIT margin increasing to 26% (2019: 15%). The operations at Edna May have changed substantially with the processing plant returning to continuous milling with the introduction of Greenfinch and Marda ore. During the period, the main sources of ore were Greenfinch and Marda ore which was supplemented by underground ore with less reliance being placed on the low grade ore.
Total operating costs at Edna May increased 162% to $103.9 million. The increase was simply due to a large increase in operating activity across the site with mines running at full capacity and with mill throughput increasing 29%. Importantly, the total tonnes mined at Edna May were 1,173kt compared to 61kt in the prior corresponding period with the increase attributable to Greenfinch and Marda operations. The operating cost per ounce at Edna May increased a relatively modest 10%.
Corporate and other costs increased from those in 2019 mainly due to an impairment of previously capitalised exploration & evaluation assets. A total of $2.5 million of exploration & evaluation assets were impaired at 31 December 2020. These impairments related mainly to Marda where exploration and evaluation activities have not identified any meaningful targets outside the current mining area.
Net Profit After Tax (NPAT)
An NPAT of $81.3 million was recorded for the half year ended 31 December 2020, representing an increase of 297% from the prior corresponding period NPAT of $20.5 million.
During the half year a total of $6.0 million was realised on the sale of non-core assets and royalty rights over previously sold tenements, these sales have been recognised as other income.
Ramelius Resources Limited 2021 Half year report
Page 10
Directors’ report
Net finance costs, which include interest income, interest expense on lease liabilities, and non-cash financing costs relating to the unwinding of provisions and contingent consideration have increased on the prior corresponding period with the drawdown of the finance facility and lower returns achieved on term deposits.
The effective tax rate of the group for the half year ended 31 December 2020 was 30.3% compared to 30.8% for the prior corresponding period. This is higher than the prescribed rate of 30% due to minor non-deductible expenditure.
Balance Sheet
The net assets of the group increased by 13% during the period as a result of a strong profit after tax.
Current assets increased by 15% largely as a result of an increase in cash and cash equivalents (see comments below) and trade and other receivables, which included a $7.4 million gold sales receivable. Inventories on hand decreased $3.5 million over the period with ore stockpiles decreasing $7.6 million, as Mt Magnet drew down on the Eridanus stocks as operations focussed on waste removal, and gold in circuit increasing $3.8 million due to the physical build up of gold in the processing plants with the timing of the gold pours. As at 31 December 2020 the group had 80,000 ounces of gold in ore stockpiles, gold in circuit, and bullion on hand (June 2020: 91,000 ounces).
Non-current assets increased by 3% due to expenditure on early construction works at the Tampia Gold Project and further investment in mine development (Eridanus cut back).
Current liabilities of the group decreased by 6% which is largely attributable to $16.3 million debt facility repayments and a $14.0 million reduction in stamp duty accruals for the Penny, Tampia and Marda gold projects. These amounts were offset by a $28.9 million increase in income tax payable relating to the six month period ended 31 December 2020. The stamp duty payments for these prior period acquisitions were finalised and paid during the current period.
Cashflow
The net cash from operations for the half year were up 196% (or $106.6 million) up on the prior corresponding period to $160.9 million (2019: $54.4 million). This increase is attributable to an increase in gold sales revenue (gold production and gold price driven – see figure 4 within this report).
A total of $83.4 million was reinvested during the period which included:
-
Payments for development of open pit and underground mines $58.6 million;
-
Payments for property plant and equipment of $17.7 million;
-
Payments for mining tenements and exploration of $6.6 million offset by proceeds from the sale of tenements and subsidiary of $3.0 million; and
-
Payments for contingent consideration for the Edna May asset acquisition of $2.3 million.
During the period $16.3 million in debt repayments were made and $16.2 million in dividends were paid to shareholders. Free cashflow[1] for the period was $67.9 million.
Cash on hand at the end of the financial year was $204.0 million (including joint venture cash) compared to $165.7 million at 30 June 2020. As at 31 December 2020 a total of 4,086 ounces (30 June 2020: 7,681 ounces) of gold was on hand with the reported cash, gold receivables[2] and gold bullion on hand at 31 December 2020 being $221.5 million (30 June 2020: $185.5 million). After taking into account the borrowings the reported net cash and gold position as at 31 December 2020 was $213.4 million (30 June 2020: $161.1 million).
Financial Risk Management
Ramelius held forward gold sales contracts at 31 December 2020 totalling 229,750 ounces of gold at an average price of $2,288 per ounce over a period to March 2023.
Development & exploration projects
Development projects
Penny Gold Project (Murchison region, WA)
The project is located approximately 20km south of Youanmi or 170km by road south east of the Mt Magnet mining and processing operations and approximately 500km north-east of Perth in Western Australia. Ore production is planned to be processed through the Mt Magnet processing plant as part of an overall feed blend. No capital modifications to the processing facility are required in order to process the Penny ore.
1 Free cash flow is defined as operating cash flows plus interest income less payments for development, exploration, property, plant, and equipment, and lease liability repayments and interest.
2 Relates to $7.4 million in gold sales made on 30 December 2020 which were settled on 4 January 2021.
Ramelius Resources Limited 2021 Half year report
Page 11
Directors’ report
On 9 November 2020 Ramelius released the results of the Penny Feasibility Study and consequently the Board’s approval to commence the project development. As a result of compelling financial outcomes from the Penny Feasibility Study, the Board also approved a Decision to Mine which should result in mine development commencing in the June 2021 Quarter, slightly earlier than contemplated by the Prefeasibility Study.
Tampia Hill Gold Project (Narembeen, WA)
The Tampia gold project is located near Narembeen in Western Australia. The Feasibility study was completed in April 2020 and focused on the option to haul ore to Ramelius’ Edna May processing facility.
On 25 January 2021, it was announced that the Tampia 10% minority interest and freehold land had been purchased and that delivery of first ore to the Edna May mill in 2022 financial year remains on schedule. Completion of the acquisition of the minority interest occurred on 3 February 2021. Settlement of the land purchase is expected to occur on 31 March 2021.
Mining/Processing Studies and Resources Conversion
The company is currently undertaking studies at Mt Magnet and Edna May to produce a longer Life of Mine Plan via increased conversion of existing or new resources.
Edna May Underground Study
An infill and extensional diamond drilling program has been completed and the resource model updated, with the revised Mineral Resource significantly higher that previous. Progress of the underground bulk versus high grade only mining study has continued although it is apparent that any decision to change from the current high grade lode mining method is best considered alongside the potential Stage 3 open pit study.
An updated study summary for other mining/processing studies currently being undertaken is shown in the table below
| Site | Study Description | Estimated Completion |
|---|---|---|
| Mt Magnet Eridanus underground: completion of deeper drilling & associated Scoping Study 30 June 2021 |
||
| Mt Magnet Processing Facility Upgrade: carry out cost/benefit analysis on upgrade from 2.0 to 2.5-2.7Mtpa (dependent on Eridanus underground study) 31 December 2021 |
||
| Mt Magnet Mt Magnet Undergrounds: complete extension drilling & evaluation at Shannon/ Hill 60/WTH Galaxy (Saturn, Mars, Titan, Hill 50); underground studies to convert a % of ~470koz Mineral Resource Morning Star: underground study to convert a % of ~80koz Mineral Resource 31 December 2021 |
||
| Edna May Stage 3 Open Pit: complete Pre Feasibility Study (assuming continuation of the current high-grade lode underground operation) 30 June 2021 |
Exploration projects
Ramelius’ exploration activities focussed on the Mt Magnet, Edna May, Marda and Penny Gold Projects during the first half of the financial year.
Mt Magnet
Eridanus Deeps Prospect
As a result of drilling conducted during the current period the company has recommended diamond drilling below the flagship Eridanus open pit at Mount Magnet. The drilling is designed to scope the potential for developing a bulk tonnage underground mine by converting the deeper inferred mineralisation within the current resource into Measured or Indicated categories.
Deeper exploratory drilling is now being conducted to test the continuity of mineralisation below and along strike of the current resource model.
Ramelius Resources Limited 2021 Half year report
Page 12
Directors’ report
Marda
Die Hardy Project
Infill resource definition RC drilling was completed over the Die Hardy Indicated and Inferred Resource to better define ore continuity ahead of final pit optimisations and pit design. The drilling confirmed a consistent main zone of mineralisation dipping 45 degrees to the southwest within the banded iron formation (“BIF”) host rock. The mineralised lode zone ranges from between 5m to 10m thick. Mineralisation occurs in brecciated BIF with strong pyrite and pyrrhotite sulphides (up to 40%) replacing magnetite.
Gold mineralisation remains open with depth. Deeper exploratory drill testing is now proposed.
Penny
RC and Diamond drilling was completed during the period targeting the Penny Shear Zone, Penny Far North, and parallel Buckshot Trend as well as depth extensions to the Penny North Deposit (Penny Deeps Prospect). Only low order gold anomalism was returned from the RC drilling, with the best result of 1m at 2.43g/t Au from 76m along the Buckshot Trend. Further diamond drilling is planned at Penny Deeps.
Edna May
Fieldwork commenced late in the December quarter following the harvesting of winter crops. Exploratory aircore drilling was undertaken over the Nulla South JV project while RC drilling was completed west of the Greenfinch pit at Edna May and within the Gibb Rock JV Project
Westonia (Edna May Mine)
RC drilling was completed of previously undrilled and mapped areas. Further drill testing around the anomalous intersections will be completed during the March 2021 quarter.
Mt Hampton (incl Symes’Find Extensions)
Site access north of Symes’ Find, to follow up previously reported high grade Aircore intersections of 3m at 5.84g/t Au from 21m, is now being finalised. Infill and strike extension drilling is proposed to be completed during the March 2021 quarter.
Auditor independence
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 14.
Rounding of Amounts
The company is of the kind referred to in ASIC Legislative Instrument 2016/191 relating to the ‘rounding off’ of amounts in the directors’ report. Amounts in the directors’ report have been rounded off in accordance with the instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar.
This report is made in accordance with a resolution of directors.
==> picture [90 x 32] intentionally omitted <==
________ Bob Vassie Chairman
Perth 23 February 2021
Ramelius Resources Limited 2021 Half year report
Page 13
Deloitte Touche Tohmatsu ABN 74 490 121 060
==> picture [148 x 28] intentionally omitted <==
Tower 2 Brookfield Place 123 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia
The Board of Directors Ramelius Resources Limited Level 1, 130 Royal Street East Perth WA 6892
Tel: +61 8 9365 7000 Fax: +61 8 9365 7001 www.deloitte.com.au
23 February 2021
Dear Directors
Auditor’s Independence Declaration to Ramelius Resources Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Ramelius Resources Limited.
As lead audit partner for the review of the financial statements of Ramelius Resources Limited for the half year ended 31 December 2020, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and (ii) any applicable code of professional conduct in relation to the review.
Yours sincerely
==> picture [180 x 34] intentionally omitted <==
DELOITTE TOUCHE TOHMATSU
==> picture [66 x 29] intentionally omitted <==
David Newman Partner Chartered Accountant
==> picture [508 x 26] intentionally omitted <==
Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Ramelius Resources Limited
ABN 51 001 717 540
Half year report ended 31 December 2020
Financial statements
Income statement and statement of other comprehensive income ......................................................... Page 16 Balance sheet ......................................................................................................................................... Page 17 Statement of changes in equity ............................................................................................................... Page 18 Statement of cash flows .......................................................................................................................... Page 19
Notes to the financial statements
About this report
- Corporate information ...................................................................................................................... Page 20 2. Basis of preparation and significant accounting policies .................................................................. Page 20 Key numbers 3. Segment information ....................................................................................................................... Page 20 4. Revenue .......................................................................................................................................... Page 22 5. Expenses ......................................................................................................................................... Page 22 6. Income tax ....................................................................................................................................... Page 23 7. Trade and other receivables ............................................................................................................ Page 23 8. Property, plant and equipment ........................................................................................................ Page 24 9. Development assets ........................................................................................................................ Page 25 10. Exploration and evaluation expenditure ........................................................................................... Page 25 11. Lease liabilities ................................................................................................................................ Page 26 12. Share capital .................................................................................................................................... Page 26 13. Dividends ......................................................................................................................................... Page 26
Other items 14. Commitments ................................................................................................................................... Page 27 15. Events occurring after the reporting period ...................................................................................... Page 27
Signed reports
Directors declaration ............................................................................................................................... Page 28 Independent auditor’s review report ....................................................................................................... Page 29
Ramelius Resources Limited 2021 Half year report
Page 15
INCOME STATEMENT
For the half year ended 31 December 2020
| Note | 2020 $’000 |
2019 $’000 |
|---|---|---|
| Revenue 4(a) Cost of sales 5(a) Gross profit Other expenses 5(b) Other income 4(b) Interest income Finance costs 5(c) Profit before income tax Income tax expense 6 Profit for the half year from continuing operations Earnings per share Basic earnings per share Diluted earnings per share |
342,226 (218,169) 124,057 (11,742) 5,982 470 (2,103) 116,664 (35,344) 81,320 Cents 10.06 9.93 |
158,451 (122,169) |
| 342,226 | ||
| (218,169) | ||
| 124,057 | 36,282 | |
| (6,900) 1,081 603 (1,445) |
||
| (11,742) | ||
| 5,982 | ||
| 470 | ||
| (2,103) | ||
| 116,664 | 29,621 | |
| (9,127) | ||
| (35,344) | ||
| 81,320 | 20,494 | |
| Cents 3.11 3.06 |
||
| Cents | ||
| 10.06 | ||
| 9.93 | ||
STATEMENT OF COMPREHENSIVE INCOME For the half year ended 31 December 2020
| 2020 $’000 |
2019 $’000 |
|
|---|---|---|
| Profit for the half year Other comprehensive income, net of tax Items that may be reclassified to profit or loss: Exchange differences on translation of foreign operations Items that may not be reclassified to profit or loss: Change in fair value of financial assets Other comprehensive (loss) / income for the half year, net of tax Total comprehensive income for the half year |
81,320 - 488 488 81,808 |
20,494 (1) (940) |
| 81,320 | ||
| - | ||
| 488 | ||
| 488 | (941) | |
| 81,808 | 19,553 | |
Ramelius Resources Limited 2021 Half year report
Page 16
BALANCE SHEET
As at 31 December 2020
| Note | 31 Dec 2020 $’000 |
30 Jun 2020 $’000 |
|---|---|---|
| Current assets Cash and cash equivalents Trade and other receivables 7 Inventories Other assets Total current assets Non current assets Other assets Financial assets at FVOCI Property, plant, and equipment 8 Development assets 9 Exploration and evaluation expenditure 10 Total non current assets Total assets Current liabilities Trade and other payables Borrowings Lease liabilities 11 Contingent consideration Current tax liabilities Provisions Current liabilities Non current liabilities Lease liabilities 11 Provisions Contingent consideration Deferred tax liabilities Total non current liabilities Total liabilities Net assets Equity Share capital 12 Reserves Retained earnings Total equity |
203,695 11,539 94,021 3,449 312,704 496 3,144 86,860 381,371 29,020 500,891 813,595 60,019 7,878 14,587 7,840 49,127 10,819 150,270 12,062 38,143 3,575 27,661 81,441 231,711 581,884 371,741 (34,153) 244,296 581,884 |
165,670 3,234 97,553 4,475 |
| 203,695 | ||
| 11,539 | ||
| 94,021 | ||
| 3,449 | ||
| 312,704 | 270,932 | |
| 503 624 78,368 208,268 196,247 |
||
| 496 | ||
| 3,144 | ||
| 86,860 | ||
| 381,371 | ||
| 29,020 | ||
| 500,891 | 484,010 | |
| 813,595 | 754,942 | |
| 82,302 23,475 16,643 6,261 21,272 9,219 |
||
| 60,019 | ||
| 7,878 | ||
| 14,587 | ||
| 7,840 | ||
| 49,127 | ||
| 10,819 | ||
| 150,270 | 159,172 | |
| 13,846 38,720 6,923 21,061 |
||
| 12,062 | ||
| 38,143 | ||
| 3,575 | ||
| 27,661 | ||
| 81,441 | 80,550 | |
| 231,711 | 239,722 | |
| 581,884 | 515,220 | |
| 370,781 (34,707) 179,146 |
||
| 371,741 | ||
| (34,153) | ||
| 244,296 | ||
| 581,884 | 515,220 | |
Ramelius Resources Limited 2021 Half year report
Page 17
STATEMENT OF CHANGES IN EQUITY
For the half year ended 31 December 2020
| Share capital $000’s |
Share-based payment reserve $000’s |
Other reserves $000’s |
Retained profits $000’s |
Total equity $000’s |
||
|---|---|---|---|---|---|---|
| Balance at 30 June 2019 Adoption of AASB 16 Leases(net of tax) At 1 July 2019 (restated) Profit for the half year Other comprehensive income Total comprehensive income Transactions with owners in their capacity as owners: Payment of dividends Share basedpayments Balance at 31 December 2019 Balance at 1 July 2020 Profit for the half year Other comprehensive loss Total comprehensive income Transactions with owners in their capacity as owners: Payment of dividends Share basedpayments Balance at 31 December 2020 |
214,218 - 214,218 - - - - 205 214,423 |
2,032 - 2,032 - - - - 545 2,577 |
(9,706) - (9,706) - (941) (941) - - (10,647) |
72,398 (696) 71,702 20,494 - 20,494 (6,579) - 85,617 |
278,942 (696) |
|
| 278,246 20,494 (941) |
||||||
| 19,553 | ||||||
| (6,579) 750 |
||||||
| 291,970 | ||||||
| 370,781 | 3,422 | (38,129) | 179,146 | 515,220 | ||
| - | - | - | 81,320 | 81,320 | ||
| - | - | 488 | - | 488 | ||
| - | - | 488 | 81,320 | 81,808 | ||
| - | - | - | (16,170) | (16,170) | ||
| 960 | 66 | - | - | 1,026 | ||
| 371,741 | 3,488 | (37,641) | 244,296 | 581,884 | ||
Ramelius Resources Limited 2021 Half year report
Page 18
STATEMENT OF CASH FLOWS
For the half year ended 31 December 2020
| Note | 2020 $’000 |
2019 $’000 |
|---|---|---|
| Cash flows from operating activities Receipts from operations Payments to suppliers and employees Net cash provided by operating activities Cash flows from investing activities Interest received Payments for property, plant, and equipment Payments for development assets Proceeds from sale of tenements Proceeds from the sale of subsidiary Loan to joint venture and joint venture parties 7 Payments for contingent consideration Payments for financial assets Payments for mining tenements and exploration Payments for site rehabilitation Net cash used in investing activities Cash flows from financing activities Interest paid Repayment of lease liabilities Repayment of borrowings Payment of dividends Return of secured deposits Net cash used in financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the half year Cash and cash equivalents at the end of the half year |
334,883 (173,949) 160,934 391 (17,723) (58,623) 2,000 1,000 (1,074) (2,307) (106) (6,630) (353) (83,425) (301) (10,133) (16,250) (16,170) 3,370 (39,484) 38,025 165,670 203,695 |
163,260 (108,910) |
| 334,883 | ||
| (173,949) | ||
| 160,934 | 54,350 | |
| 559 (14,400) (51,170) 900 - - - (6,640) (7,866) (300) |
||
| 391 | ||
| (17,723) | ||
| (58,623) | ||
| 2,000 | ||
| 1,000 | ||
| (1,074) | ||
| (2,307) | ||
| (106) | ||
| (6,630) | ||
| (353) | ||
| (83,425) | (78,917) | |
| (512) (6,339) - (6,579) 4,130 |
||
| (301) | ||
| (10,133) | ||
| (16,250) | ||
| (16,170) | ||
| 3,370 | ||
| (39,484) | (9,300) | |
| (33,867) 95,815 |
||
| 38,025 | ||
| 165,670 | ||
| 203,695 | 61,948 | |
Ramelius Resources Limited 2021 Half year report
Page 19
Notes to the financial statements
Note 1: Corporate information
The financial report of Ramelius Resources Limited (referred to as 'Ramelius', 'the company' or 'the group') for the half year ended 31 December 2020 was authorised for issue in accordance with a resolution of the directors on 23 February 2020. Ramelius is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange ('the ASX').
Note 2: Basis of preparation and accounting policies
Statement of compliance
The half year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 Interim Financial Reporting . Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting . The half year report does not include notes of the type normally included in an annual financial report and should be read in conjunction with the most recent annual financial report.
Basis of preparation
The condensed consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.
The company is a company of the kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument , dated 24 March 2016, and in accordance with that Corporations Instrument amounts in the financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.
Accounting policies
The accounting policies and methods of computation adopted in the preparation of the half year financial report are consistent with those adopted and disclosed in the company’s 2020 annual financial report for the year ended 30 June 2020 and corresponding prior period. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.
New and revised Accounting Standards and Interpretations
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘’AASB’’) that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Note 3: Segment information
Management has determined the operating segments based on internal reports about components of the group that are regularly reviewed by the Chief Operating Decision Maker (CODM), being the Managing Director and Chief Executive Officer, to make strategic decisions. Reportable operating segments are Mt Magnet, Edna May and Exploration. The group operates primarily in one business segment, namely the exploration, development and production of minerals with a focus on gold. The CODM monitors performance in these areas separately. Unless stated otherwise, all amounts reported to the CODM are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the group.
In June 2020, the Tampia Gold Project was transferred to a development asset coinciding with the Decision to Mine and project development. The Tampia Gold Project forms part of the Edna May operating segment with ore to be hauled to, and blended with, ore sourced from the Edna May Gold Mine and Marda Gold Project.
During the period, coinciding with the Decision to Mine, the Penny Gold Project was transferred to a development asset (see note 9). Accordingly, the Penny Gold Project now forms part of the Mt Magnet operating segment with ore from that project to be hauled to, and blended with, ore sourced from the Mt Magnet and Vivien Gold Mines.
Ramelius Resources Limited 2021 Half year report
Page 20
Notes to the financial statements
Operating segment performance details for the half years ended 31 December 2020 and 31 December 2019 are set out below:
| Halfyear ending 31 December 2020 | Mt Magnet $’000 |
Edna May $’000 |
Exploration $’000 |
Total $’000 |
|---|---|---|---|---|
| Segment revenue 202,646 Cost of sales (104,705) Amortisation and depreciation (39,684) Movement in inventory (9,027) Deferred mining costs 39,171 Gross margin 88,401 Impairment and exploration write-off - Segment margin 88,401 Interest income Finance costs Other items Profit before income tax from continuing operations |
139,580 (86,967) (34,593) 4,690 12,946 35,656 - 35,656 |
- - - - - - (2,680) (2,680) |
||
| 342,226 | ||||
| (191,672) | ||||
| (74,277) | ||||
| (4,337) | ||||
| 52,117 | ||||
| 124,057 | ||||
| (2,680) | ||||
| 121,377 | ||||
| 470 | ||||
| (2,103) | ||||
| (3,080) | ||||
| 116,664 | ||||
| Halfyear ending 31 December 2019 | Mt Magnet $’000 |
Edna May $’000 |
Exploration $’000 |
Total $’000 |
|---|---|---|---|---|
| Segment revenue Cost of sales Amortisation and depreciation Movement in inventory Deferred mining costs |
111,812 (105,154) (25,403) 15,485 32,580 |
46,639 (45,526) (9,851) 3,588 12,112 |
- - - - - |
158,451 |
| (150,680) (35,254) 19,073 44,692 |
||||
| Gross margin 29,320 Impairment and exploration write-off - Segment margin 29,320 Interest income Finance costs Other items Profit before income tax from continuing operations |
6,962 - 6,962 |
- (896) (896) |
36,282 (896) |
|
| 35,386 | ||||
| 603 (1,445) (4,923) |
||||
| 29,621 |
Ramelius Resources Limited 2021 Half year report
Page 21
Notes to the financial statements
Note 4: Revenue
The group derives the following types of revenue:
(a) Sales revenue
| (a) Sales revenue |
||
|---|---|---|
| Halfyear ended | 31 Dec 2020 $’000 |
31 Dec 2019 $’000 |
| Gold sales Silver sales Other revenue Total sales revenue from continuing operations |
341,732 396 98 342,226 |
158,011 376 64 |
| 341,732 | ||
| 396 | ||
| 98 | ||
| 342,226 | 158,451 | |
| (b) Other income Gain on divestment of tenements Gain on sale of investments Total other income from continuing operations |
5,000 982 5,982 |
1,081 - |
|---|---|---|
| 5,000 | ||
| 982 | ||
| 5,982 | 1,081 | |
Note 5: Expenses
Profit before tax includes the following expenses whose disclosure is relevant in explaining the performance of the group:
(a) Cost of sales
| Halfyear ended Note |
31 Dec 2020 $’000 |
31 Dec 2019 $’000 |
|---|---|---|
| Mining and milling production costs Employee benefits expense Royalties Amortisation and depreciation 8 & 9 Inventory movements Total cost of sales from continuing operations |
102,327 23,211 14,017 74,277 4,337 218,169 |
76,609 20,394 8,985 35,254 (19,073) |
| 102,327 | ||
| 23,211 | ||
| 14,017 | ||
| 74,277 | ||
| 4,337 | ||
| 218,169 | 122,169 | |
(b) Other expenses
| Halfyear ended Note |
31 Dec 2020 $’000 |
31 Dec 2019 $’000 |
|---|---|---|
| Employee benefit expense Equity settled share-based payments Other expenses Depreciation 8 Foreign exchange losses Exploration and evaluation costs FV adjustment on deferred costs Impairment of exploration and evaluation assets 10 Total other expenses from continuing operations |
5,021 1,026 2,443 266 214 148 92 2,532 11,742 |
3,449 750 1,599 193 13 221 - 675 |
| 5,021 | ||
| 1,026 | ||
| 2,443 | ||
| 266 | ||
| 214 | ||
| 148 | ||
| 92 | ||
| 2,532 | ||
| 11,742 | 6,900 | |
Ramelius Resources Limited 2021 Half year report
Page 22
Notes to the financial statements
| (c) Finance costs |
||
|---|---|---|
| Halfyear ended Note |
31 Dec 2020 $’000 |
31 Dec 2019 $’000 |
| Provisions: unwinding of discount Contingent consideration: unwinding of discount Interest on leases Interest and finance charges Total finance costs from continuing operations |
184 445 505 969 2,103 |
315 618 477 35 |
| 184 | ||
| 445 | ||
| 505 | ||
| 969 | ||
| 2,103 | 1,445 | |
Note 6: Income tax
Income tax expense is recognised based on management’s estimate of the weighted average effective income tax rate expected for the full financial year. The estimated average tax rate used for the half year ended 31 December 2020 is 30.3%, compared to 30.8% for 31 December 2019. The effective tax rate is higher than 30% for the half year due to non-deductible expenditure.
Note 7: Trade and other receivables
| Note 7: Trade and other receivables | ||
|---|---|---|
| 31 Dec 2020 $’000 |
30 Jun 2020 $’000 |
|
| Gold sales receivable Trade & other receivables Receivable from Tampia Joint Venture parties Total trade and other receivables |
7,389 3,076 1,074 11,539 |
- 3,243 - |
| 7,389 | ||
| 3,076 | ||
| 1,074 | ||
| 11,539 | 3,234 | |
As disclosed in Note 15, Ramelius completed the acquisition of the remaining 10% interest in the Tampia Gold Joint Venture on 3 February 2021. This receivable will be realised as part of the acquisition of the remaining minority interest with the Joint Venture being terminated and 100% of the Tampia Gold Project being consolidated into the Ramelius group.
Ramelius Resources Limited 2021 Half year report
Page 23
Notes to the financial statements
Note 8: Property, plant, and equipment
| For the half year ended 31 December 2020 |
Land and buildings $’000 |
Land and buildings $’000 |
Plant and equipment $’000 |
Plant and equipment $’000 |
Assets under construction $’000 |
Assets under construction $’000 |
Right of use asset $’000 |
Right of use asset $’000 |
Total $’000 |
|---|---|---|---|---|---|---|---|---|---|
| As at 1 July 2020 Cost or fair value Accumulated depreciation Net book amount Half year ended 31 December 2020 Opening net book amount Additions Disposals Transfers to mine development Transfers Depreciation charge Closing net book amount As at 31 December 2020 Cost or fair value Accumulated depreciation Net book amount |
9,411 (2,185) 7,226 7,226 - - - 66 (268) 7,024 9,475 (2,451) 7,024 |
118,781 (84,678) 34,103 34,103 4 (7) - 10,026 (4,954) 39,172 128,784 (89,612) 39,172 |
7,340 - 7,340 7,340 17,726 - (160) (10,092) - 14,814 14,814 - 14,814 |
44,223 (14,524) 29,699 29,699 5,788 - - - (9,637) 25,850 50,011 (24,161) 25,850 |
|||||
| 9,411 | 118,781 | 7,340 | 44,223 | 179,755 | |||||
| (2,185) | (84,678) | - | (14,524) | (101,387) | |||||
| 7,226 | 34,103 | 7,340 | 29,699 | 78,368 | |||||
| 7,226 | 34,103 | 7,340 | 29,699 | 78,368 | |||||
| - | 4 | 17,726 | 5,788 | 23,518 | |||||
| - | (7) | - | - | (7) | |||||
| - | - | (160) | - | (160) | |||||
| 66 | 10,026 | (10,092) | - | - | |||||
| (268) | (4,954) | - | (9,637) | (14,859) | |||||
| 7,024 | 39,172 | 14,814 | 25,850 | 86,860 | |||||
| 9,475 | 128,784 | 14,814 | 50,011 | 203,084 | |||||
| (2,451) | (89,612) | - | (24,161) | (116,224) | |||||
| 7,024 | 39,172 | 14,814 | 25,850 | 86,860 | |||||
| For the year ended 30 June 2020 |
Land and buildings $’000 |
Land and buildings $’000 |
Plant and equipment $’000 |
Plant and equipment $’000 |
Assets under construction $’000 |
Assets under construction $’000 |
Right of use asset $’000 |
Total $’000 |
Total $’000 |
|---|---|---|---|---|---|---|---|---|---|
| As at 1 July 2019 Cost Accumulated depreciation Adoption of AASB 16 Leases Net book amount Year ended 30 June 2020 Opening net book amount Acquisition of subsidiary Additions Disposals Transfers Depreciation charge Closing net book amount As at 30 June 2020 Cost Accumulated depreciation Net book amount |
- - 20,262 20,262 20,262 - 23,961 - - (14,524) 29,699 44,223 (14,524) 29,699 |
||||||||
| 8,651 (1,577) - |
107,852 (73,831) - |
2,728 - - |
- - 20,262 |
119,231 (75,408) 20,262 |
|||||
| 7,074 | 34,021 | 2,728 | 20,262 | 64,085 | |||||
| 7,074 - 692 (127) 177 (590) |
34,021 365 7,193 (93) 3,533 (10,916) |
2,728 - 8,322 - (3,710) - |
20,262 - 23,961 - - (14,524) |
64,085 365 40,168 (220) - (26,030) |
|||||
| 7,226 | 34,103 | 7,340 | 29,699 | 78,368 | |||||
| 9,411 (2,185) |
118,781 (84,678) |
7,340 - |
44,223 (14,524) |
179,755 (101,387) |
|||||
| 7,226 | 34,103 | 7,340 | 29,699 | 78,368 | |||||
Ramelius Resources Limited 2021 Half year report
Page 24
Notes to the financial statements
Note 9: Development assets
| Note 9: Development assets | ||
|---|---|---|
| 31 Dec 2020 $’000 |
30 Jun 2020 $’000 |
|
| Development assets Less: accumulated amortisation Net book amount Development asset reconciliation Opening net book amount Additions Restoration and rehabilitation adjustment Transfer from property, plant, and equipment Transfer from exploration and evaluation asset Amortisation Closing net book amount |
748,921 (367,550) 381,371 208,268 61,121 - 160 171,506 (59,684) 381,371 |
516,134 (307,866) |
| 748,921 | ||
| (367,550) | ||
| 381,371 | 208,268 | |
| 99,430 107,537 (4,753) - 83,537 (77,483) |
||
| 208,268 | ||
| 61,121 | ||
| - | ||
| 160 | ||
| 171,506 | ||
| (59,684) | ||
| 381,371 | 208,268 | |
The comparative information shown above, reconciling the opening and closing mine development asset written down value, is for the financial year ended 30 June 2020.
(a) Transfer to development assets
During the period a total of $171,506,000 was transferred from an exploration and evaluation assets to a development asset. These amounts related to the Penny Gold Project. The Penny Gold Project costs, including the acquisition costs, were transferred to mine development upon the completion of the Feasibility Study and subsequent Decision to Mine with the project now moving into development.
Note 10: Exploration and evaluation expenditure
| Exploration and evaluation Exploration and evaluation asset reconciliation Opening net book amount Additions on the acquisition of subsidiary Additions Disposals Impairment Exchange differences Transfer to development asset Closing net book amount |
29,020 | 196,247 | |
|---|---|---|---|
| 99,442 168,515 18,355 (208) (6,336) 16 (83,537) |
|||
| 196,247 | |||
| 181 | |||
| 6,648 | |||
| (18) | |||
| (2,532) | |||
| - | |||
| (171,506) | |||
| 29,020 | 196,247 | ||
The comparative information shown above, reconciling the opening and closing exploration and evaluation expenditure written down value, is for the financial year ended 30 June 2020.
Ramelius Resources Limited 2021 Half year report
Page 25
Notes to the financial statements
Note 11: Lease liabilities
| Note 11: Lease liabilities | ||
|---|---|---|
| 31 Dec 2020 $’000 |
30 Jun 2020 $’000 |
|
| Maturity analysis: Year 1 Year 2 Year 3 Year 4 Gross lease liability Less future interest charges Total lease liability Analysed as: Current Non-current Total lease liability |
15,231 7,856 3,561 1,028 27,676 (1,027) 26,649 14,587 12,062 26,649 |
17,431 8,064 4,269 2,057 |
| 31,821 (1,332) |
||
| 30,489 | ||
| 16,643 13,846 |
||
| 14,587 | ||
| 12,062 | ||
| 26,649 | 30,489 | |
Note 12: Share capital
| Note 12:Share capital | |||
|---|---|---|---|
| Number of shares |
$’000 | ||
| Ordinary shares Share capital at 1 July 2019 Shares issued as part of the acquisition of Explaurum Limited Shares issued from exercise of options Shares issued from exercise of performance rights Transfer from share based payment reserve At 30 June 2020 Shares issued from exercise of performance rights |
214,218 | ||
| 657,872,969 | |||
| 155,523 300 598 142 |
|||
| 145,203,969 | |||
| 1,500,000 | |||
| 1,377,522 | |||
| - | |||
| 805,954,460 | 370,781 | ||
| 960 | |||
| 3,062,806 | |||
| At 31 December 2020 | 809,017,266 | 371,741 | |
| Note 13: Dividends | ||
|---|---|---|
| 31 Dec 2020 $’000 |
31 Dec 2019 $’000 |
|
| Final dividend for the year ended 30 June 2020 of 2 cents (2019:1 cent) per fully paid sharepaid on 2 October 2020 |
16,170 | 6,579 |
| 16,170 | ||
Ramelius Resources Limited 2021 Half year report
Page 26
Notes to the financial statements
Note 14: Commitments
(a) Gold delivery commitments
Forward sale contracts are accounted for as sale contracts with revenue recognised once gold has been physically delivered. The physical gold delivery contracts are considered own use contracts and therefore do not fall within the scope of AASB 9 Financial Instruments: Recognition and Measurement . As a result, no derivatives are required to be recognised. Forward gold sale contract delivery commitments are shown below:
| Gold delivery commitments | Gold for physical | Contracted sales | Committed gold sales value $’000 |
|||
|---|---|---|---|---|---|---|
| delivery | price | |||||
| Oz | A$/oz | |||||
| As at 31 December 2020 Within one year Between one and five years Total As at 30 June 2020 Within one year Between one and five years Total |
||||||
| 130,250 | $2,226 | 289,990 | ||||
| 99,500 | $2,368 | 235,604 | ||||
| 229,750 | $2,288 | 525,594 | ||||
| 125,850 121,500 247,350 |
$2,046 $2,227 $2,135 |
257,456 270,525 |
||||
| **527,981 ** |
(b) Capital commitments Capital expenditure contracted for at the end of the reporting period but not recognised as a liability totalled $3,542,000 and related to the development of the Tampia Hill Gold Project.
Note 15: Events occurring after the reporting period
Purchase of the remaining 10% minority interest in the Tampia Gold Project
On 3 February 2021 Ramelius completed the acquisition of the remaining 10% minority interest in the Tampia Gold Project that was previously held by Tampiagold Pty Ltd and Goldoro Pty Ltd. Ramelius now owns 100% of the Tampia Gold Project and will operate it independently. The consideration for the acquisition of the minority interest comprised:
-
$1,000,000 cash (paid in November 2020);
-
$2,000,000 cash (paid in February 2021);
-
5,000,000 Ramelius shares issued under Listing Rule 7.1 (issued in February 2021); and
-
2% royalty on any gold production from the Tampia Gold Project above 185,539 ounces.
Purchase of Tampia Gold Project freehold land
On 25 January 2021 Ramelius reached an agreement to purchase the primary freehold land associated with the Tampia Gold Project for $6,000,000. The consideration is to be paid over two payments with $2,300,000 paid in January 2021 and the balance of $3,7000,000 to be paid at settlement which is anticipated to be 31 March 2021.
The agreement allows for immediate access to the Tampia Gold Project area for site preparations which is in line with existing production schedules.
There were no other matters or circumstances that have arisen since 31 December 2020 that have or may significantly affect:
-
(a) The group’s operations in future financial years;
-
(b) The results of operations in future financial years; or
-
(c) The group’s state of affairs in future financial years.
COVID-19
On 31 January 2021, the West Australian Government announced lockdown measures as a result of COVID-19. Measures included a five day lockdown of the Perth metropolitan areas along with travel restrictions between Perth and other areas of Western Australia. Ramelius has not seen a significant operational or financial impact as a result of these lockdown measures. The outbreak and response of governments in dealing with COVID-19 continues to evolve and can at times be uncertain. Ramelius continues to monitor these developments and respond accordingly. At the date of this report the bulk of the travel restrictions have been removed.
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Directors’ declaration
The directors declare that:
-
(a) in the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable, and
-
(b) in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001 including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity.
Signed in accordance with a resolution of the directors made pursuant to s.303(5) of the Corporations Act 2001 .
On behalf of the Directors
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Bob Vassie Chairman
Perth 23 February 2021
Ramelius Resources Limited 2021 Half year report
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Deloitte Touche Tohmatsu ABN 74 490 121 060
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Tower 2 Brookfield Place 123 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia
Independent Auditor’s Review Report to the members of
Tel: +61 8 9365 7000 Fax: +61 8 9365 7001 www.deloitte.com.au
Ramelius Resources Limited
Conclusion
We have reviewed the half-year financial report of Ramelius Resources Limited (the “Company”) and its subsidiaries (the “Group”), which comprises the balance sheet as at 31 December 2020, and the income statement, the statement of comprehensive income, the statement of cash flows, and the statement of changes in equity for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration as set out on pages 16 to 28.
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of the Group is not in accordance with the Corporations Act 2001 , including:
-
(a) giving a true and fair view of the Group’s financial position as at 31 December 2020 and of its performance for the half-year ended on that date; and
-
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .
Basis for Conclusion
We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity . Our responsibilities are further described in the Auditor’s Responsibilities for the Review of the Half-year Financial Report section of our report. We are independent of the Group in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s review report.
Directors’ Responsibilities for the Half-year Financial Report
The directors of the Company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
Auditor’s Responsibilities for the Review of the Half-year Financial Report
Our responsibility is to express a conclusion on the half-year financial report based on our review. ASRE 2410 requires us to conclude whether we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the Group’s financial position as at 31 December 2020 and its performance for the half-year ended on that date, and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .
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Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
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A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
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DELOITTE TOUCHE TOHMATSU
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David Newman Partner Chartered Accountants Perth, 23 February 2021
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Executive Director
Mark Zeptner Managing Director and Chief Executive Officer
Non-Executive Directors
Bob Vassie ( Chair) Michael Bohm David Southam Natalia Streltsova
Manager Legal & Company Secretary
Richard Jones
Chief Operating Officer Duncan Coutts
Chief Financial Officer
Tim Manners
Registered office
Level 1, 130 Royal Street East Perth WA 6004 Telephone:+ 61 8 9202 1127 Website: www.rameliusresources.com.au Email: [email protected]
Share registry
Computershare Investor Services Pty Limited Level 5, 115 Grenfell Street Adelaide SA 5000 1300 556 161 (within Australia) + 61 3 9415 4000 (outside Australia)
Auditor
Deloitte Touche Tohmatsu Brookfield Place, Tower 2 123 St Georges Terrace Perth WA 6000 + 61 8 9635 7000
Stock exchange listing
Ramelius Resources Limited (“RMS”) shares are listed on the Australian Securities Exchange (ASX)
Ramelius Resources Limited 2021 Half year report
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