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Ramelius Resources: Digging Into The Q3 Results

May 04, 2020 2:02 AM ETRamelius Resources Limited (RMLRF)10 Comments
Taylor Dart profile picture
Taylor Dart


  • Ramelius Resources remains on track to meet guidance and is one of the few gold miners to maintain FY-2020 guidance despite the COVID-19 related caution.
  • The company's recent Penny West acquisition is a low-risk, high-reward bet on an extremely high-grade resource, and could be a significant game-changer if this resource continues down-plunge.
  • In addition, contributions from the Marda open pits continue to beef up Edna May production, with quarterly gold production set to hit a new quarterly record in fiscal Q4.
  • Based on a solid growth profile and speculative upside through the acquired Penny West Project, I see the stock as a Hold, and I believe any pullbacks below A$1.15 would provide buying opportunities.

The Q1 earnings season for the Gold Miners Index (GDX) is finally underway, and it's been a challenging start for many names, with less than half of companies beating revenue estimates, and several companies slashing their FY-2020 guidance due to COVID-19 uncertainty. The Australian gold miners seem to be the least affected by the COVID-19 situation, however, with minimal shutdowns and negligible revisions to guidance, and Australian miner Ramelius Resources (OTCPK:RMLRF) is no exception. In fact, the company's fiscal Q4 2020 guidance is projecting a new multi-year high for gold production, and the company remains on track to hit its FY-2020 forecast of 215,000 ounces at the midpoint. Meanwhile, the stock has regained most of its lost ground in the mid-March panic and continues to build a 1-year base below its all-time highs. Given the company's strong growth profile and improving technical outlook, I believe a test of all-time highs near A$1.65 is likely in the next twelve months, and I would view any pullbacks below A$1.15 as low-risk buying opportunities. All figures are based on an Australian Dollar to US Dollar Ratio of 0.64.

(Source: Company Website)

Ramelius Resources is one of the most recent names to release its fiscal Q3 2020 earnings, and the company had an exceptional quarter, reporting quarterly gold production of 51,800 ounces at all-in sustaining costs of A$1,248/oz [$US799/oz]. This places the company's year-to-date gold production at 146,000 ounces at A$1,243/oz [US$796/oz], a cost figure that is nearly 20% below the FY-2019 industry average of $980/oz. While it may seem like the company has no hope of hitting its FY-2020 production guidance of 215,000 ounces at the midpoint, the company adamantly reiterated FY-2020 guidance as it believes it can produce 67,000 plus ounces in fiscal Q4. The bump in production is thanks to a helpful contribution

This article was written by

Taylor Dart profile picture
"A bull market is when you check your stocks every day to see how much they went up. A bear market is when you don't bother to look anymore."- John Hammerslough You can access more in-depth research, my current portfolios, new positions I am entering/exiting, and proprietary sentiment indicators for gold miners in my newsletter below.  Returns Link: https://imgur.com/a/6fcWjD6Subscription Link: https://buy.stripe.com/3cseV37nl9Y7dUcaEI - Disclosure: I am not a financial advisor. All articles are my opinion - they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading or investing.

Analyst’s Disclosure: I am/we are long GLD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (10)

bengalesq profile picture
Given that so many of these trade OTC, I am assuming when gold prices dip they can be hard to sell. Does this sound right?
Taylor Dart profile picture
Hi Bengal,

Yes, these articles are mostly for my Aussie followers as these stocks are much more liquid on ASX. The way around it, but forgive me if I’m wrong, is some followers have mentioned you can buy across different exchanges using Interactive Brokers I think, though fees are a little higher than normal trades. You could ask around, but I recall this being mentioned somewhere.

If anyone has any insight into this, feel free to chime in.
hi all, Taylor's right, much more liquid on the Aussie exchange, with good volume and fair bid/offer spreads,t
Ramelius Resources FPO (RMS-ASX)
Yes, as Taylor and @tonyconnolly have stated it's better to buy on the local exchanges for liquidity and spread reasons. I'm in the UK but nearly all the brokers permit international trading. I use Interactive Brokers and, for my son's investments IG.com (allows Aussie trades) but there's also DeGiro, Saxo Bank and many others. Fees not always more expensive - you just have to shop around.
11146471 profile picture
My biggest gold holding. An adamant company.
Thanks Taylor, nice work
Thanks a lot..
would You Please .. give Price is US$...
Thanks in advance.
Hiya, 1.65 divided by 1.6 gives approx 1.03USD...but for liquidity reasons, you'd be better off buying the A$ stock
thanks Taylor, one to wait for,t
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