Ramelius Resources : June 2016 Quarterly Activities Report

Microsoft Word - ASX RELEASE 20160726 June 2016 Quarterly Activities Report FINAL

26 July 2016

ISSUED CAPITAL

Ordinary Shares: 475M

DIRECTORS

NON-EXECUTIVE CHAIRMAN:

Robert Kennedy

NON-EXECUTIVE DIRECTORS:

Kevin Lines Michael Bohm

MANAGING DIRECTOR:

Mark Zeptner

www.rameliusresources.com.au info@rameliusresources.com.au

RAMELIUS RESOURCES LIMITED

Registered Office

Suite 4, 148 Greenhill Road Parkside, Adelaide

South Australia 5063

Tel +61 8 8271 1999

Fax +61 8 8271 1988

Operations Office

Level 1, 130 Royal Street East Perth WA 6004

Tel +61 8 9202 1127

Fax +61 8 9202 1138

26 July 2016 For Immediate Release June 2016 Quarterly Activities Report HIGHLIGHTS - OPERATIONS & DEVELOPMENT

• Group gold production of 32,752 ounces, exceeding the Guidance range of 28-32,000 ounces, at an AISC of A$1,145/oz (US$859/oz*) (Guidance A$1,175/oz or US$881/oz*)

• Annual group gold production for FY2016 year of 110,839 ounces at an AISC of A$1,157/oz (Guidance A$1,150/oz or US$862/oz*)

• Milky Way gold project (WA) - results released 27th June 2016, including; o 3m at 21.68 g/t Au from 160m in GXRC1387 incl. 2m at 32.25 g/t Au o 17m at 5.61 g/t Au from 73m in GXRC1400, incl. 4m at 21.50 g/t Au

  • 7m at 4.79 g/t Au from 156m in GXRC1399, incl. 1m at 21.70 g/t Au

  • 20m at 5.85 g/t Au from 173m in GXRC1399, incl. 1m at 83.10 g/t Au

  • Further RC drilling and mining studies/ore reserve work underway

    PRODUCTION GUIDANCE - SEPTEMBER 2016 QUARTER & FY2017 FULL YEAR

• Group gold production for the September 2016 Quarter is expected to be

  31-35,000 ounces at an AISC of ~A$1,100/oz (US$825/oz*) as follows:

• Capital development expenditure of approximately A$10.5M

  • Titan open pit pre-strip (Mt Magnet) - A$4.5M

  • Blackmans open pit set-up (Mt Magnet) - A$1.0M

  • Water Tank Hill underground set-up (Mt Magnet) - A$2.5M

  • Exploration (Mt Magnet & Tanami) - A$2.5M

• Annual group gold production for FY2017 full year is expected to be

  135,000 ounces at an AISC of A$1,050/oz (US$787/oz*)

  * exchange rate assumed 0.75 US$ : A$

  HIGHLIGHTS - CORPORATE

• Quarterly gold sales A$56.6M at sale price of A$1,647/oz

• Cash & gold on hand of A$49.7M (Mar-16 Qtr: A$37.8M), after A$5.7M expenditure comprising Titan open pit pre-strip at Mt Magnet (A$1.9M), Nil Desperandum pre-strip at Kathleen Valley (A$1.7M) & exploration (A$2.1M)

• At 30 June 2016, forward gold sales consisted of 105,846 ounces of gold at an average price of A$1,601 per ounce over the period to December 2017

• Subsequent to the Quarter end, the Company forward sold an additional 30,000 ounces of gold at an average forward price of A$1,830 per ounce

• Nil corporate debt (CBA A$10M finance facility remains undrawn)

ABOUT RAMELIUS

Figure 1: Ramelius' Operations & Development Project Locations

Ramelius owns the Mt Magnet gold mining and processing operation and is operating the high grade Vivien and Kathleen Valley gold mines near Leinster, in Western Australia. The Burbanks Treatment Plant is located approximately 9 kilometres south of Coolgardie in WA and is currently on care and maintenance.

PRODUCTION SUMMARY

Table 1: Gold Production and Financial Information - June 2016 Quarter

Units

Mt Magnet

Vivien

Kathleen Valley

Total

Ore mined (high grade)	t	176,589	19,116	132,382	328,087
Ore processed	t	271,911	18,949	109,571	400,431
Head grade	g/t	1.62	9.57	4.55	2.79
Gold recovery	%	92	97	96	95
Gold recovered	oz	13,037	5,653	15,436	34,126

Fine gold poured	oz	12,577	5,430	14,745	32,752
Cash operating costs^	A$M	30.92
Cash operating cost (C1) ^	A$/oz	944

Gold sales	oz	34,375
All‐In Sustaining Costs (AISC) *^	A$M	39.36
AISC^	A$/oz	1,145

Gold sales	A$M	56.61
Average realised gold price	A$/oz	1,647

* as per World Gold Council guidelines

^ net of by‐product credits

OPERATIONS

Mt Magnet Gold Mine (WA)

Mining by Ramelius at Mt Magnet has concentrated on the Galaxy mine area, approximately one kilometre from the processing plant, over the past four years consisting of open pit mining only. Water Tank Hill is an underground project currently forming part of the Company's development pipeline in the 2017 financial year, whilst the Milky Way area is the current focus of mine life extensions and potential accelerated production from the 2018 financial year (refer Figure 2).

Figure 2: Mt Magnet key mining areas

The Titan pit cutback commenced in June 2016. Titan is located immediately west of the Saturn pit, completed in 2015. Titan mineralisation is hosted by a felsic porphyry and occurs as a large stockwork style orebody. The existing Titan pit was mined in 2000-2003, with recorded production of 920,000 tonnes @ 1.75 g/t for 51,700 ounces.

Mining of the Perseverance (Percy) open pit continued throughout the Quarter. The pit is now well below the base of the old pit and ore grades have improved significantly, helping to contribute to the high Quarterly mill grade. Significant underground stope voids are being encountered and have slowed mining rates as expected. Claimed high-grade ore mined was 176,589 tonnes @ 2.12 g/t for 12,028 ounces with mill reconciled production (including the addition of stockpiled low grade) of 271,911 tonnes @ 1.62 g/t for 13,037 ounces recovered.

Mill throughput was solid, even with a SAG mill reline being conducted in June and little oxide ore material being available for processing. Total mill production, including Kathleen Valley and Vivien ore, was 400,431 tonnes @ 2.79 g/t. The SAG mill reline saw a change to larger liners/lifters being used and this has led to increased mill throughput rates. It is currently believed these larger liners will also extend liner life, reducing reline frequency, although this won't be confirmed until the next reline currently scheduled for mid-FY2017.

Figure 3: Ramelius geologists in Percy pit

Gold production (refer Figure 5) exceeded the Guidance range of 28-32,000 ounces, with 32,752 ounces of fine gold poured for the Quarter. Overall metallurgical recoveries for the Quarter were once again maintained at better than budget levels, with an overall recovery of 95%.

Cash costs for the period decreased appreciably to A$944/oz and AISC also dropped to A$1,145/oz (Guidance A$1,175/oz). This was primarily a result of higher overall gold production.

Production for the September 2016 Quarter is expected to be between 31,000 and 35,000 ounces. The midpoint of forecast production (33,000oz) is expected to be delivered at an AISC of A$1,100/oz. First stoping ore from Vivien is expected to be delivered during the Quarter along with continued good grades from both the Kathleen Valley and Percy open pits.