Gold miner Ramelius Resources (ASX: RMS) has capped off a productive 2018 financial year, posting record metrics and citing the acquisition of the Edna May gold mine as the main contributor to its final figures.
The company reported a sales revenue of $341.8 million for the year ending 30 June 2018, representing a substantial 73% increase on the $197.4m recorded in the previous corresponding period and impacted primarily by the purchase of Edna May from Evolution Mining (ASX: EVN) in October.
That acquisition contributed $115.2m to the company’s revenue – comprising $114.5m from sales of 67,520 ounces of gold during the year at an average realised gold price for Edna May of $1696 per ounce, plus associated silver sales of A$0.8m.
For the fourth year in a row, Ramelius achieved a healthy net profit before tax – this year jumping 81% to $45.5 million from $25.1m in 2017 – with Edna May contributing $15.8m.
Net profit after tax followed the same trend, coming in at $30.8m or 74% higher than the $17.7m posted in 2017.
Earnings before interest tax depreciation and amortisation increased to $127m (up 50% from $84.7m in 2017), due in part to Edna May and also to lower operating costs and an increase in the average realised gold price from $1628/oz in 2017 to $1670/oz in 2018.
Cash on hand at the end of the year was $75.0m compared to $78.6m for 2017, due largely to an upfront cash payment for the Edna May project.
Ramelius managing director Mark Zeptner said the positive results demonstrate the strength of the company’s current asset portfolio.
“The addition of Edna May has made us a highly profitable company with the capability, resource base and desire to be Australia’s next mid-tier gold producer,” he said.
Ramelius also reported record gold production for 2018 of 208,118oz, representing an increase of 66% on the 125,488oz produced in 2017 and underpinned by strong performances from its flagship Mt Magnet and Vivien mines, in WA’s Murchison district.
Edna May acquisition
Ramelius acquired the operating Edna May gold mine from Evolution in October for $38.4m cash from existing funds, plus approximately $50m in contingent payments made under a share purchase agreement.
Located 300 kilometres east of Perth, the mine has a chequered history, commencing with underground operations in the early 1900s which produced a total of 360,000oz of gold at an average grade of 19.5g/t from seven reefs to a depth of 240 metres.
In 1984, modern mining took over with open-pit operations owned by Australian Consolidated Minerals, extracting mainly oxide ore to produce 270,000oz of gold at an average grade of 1.9g/t.
Present day operations began with Catalpa Resources in 2010, which merged with Conquest Mining a year later to form Evolution Mining.
Under Evolution’s ownership, Edna May produced more than 500,000oz, with annual production ranging from 66,000oz to 99,000oz.
In June, after a 13,500 metre drilling campaign at the Edna May deposit, Ramelius announced a 12% increase in the project’s mineral resources, to 26.1 million tonnes at 0.9 grams per tonne gold for 794,000oz.
At mid-afternoon trade, shares in Ramelius Resources were trading 6.45% higher at $0.495.