Ramelius Resources (RMS) – This horse taking peptides?

Ramelius Resources is a gold producer with its key projects being the Mt Magnet, Edna May and Rebecca-Roe development. The company was incorporated in 1979 and is based in Perth, Australia.

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Ramelius Resources delivered a five-year outlook following its recent Spartan acquisition that forecasts gold production will more than double to circa 500,000 ounces a year by FY30, although free cashflow (FCF) will take a hit of circa 23% versus consensus estimates in FY26 before improving from there, with the outlook signalling upgrades of 25% for market expectations for FCF over FY27–30. Some additional capital expenditure has been brought forward to FY26 to expand the Mt Magnet mill capacity to around 4.3 million tonnes of ore per annum (Mtpa) by FY28 – construction starts March quarter next year with completion scheduled for the September quarter in 2027, but the net impact over FY27–30 and beyond should be broadly positive versus previous consensus estimates.

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We note construction at the Rebecca-Roe development (which accounts for 17% of our Ramelius valuation, versus 83% for the Mat Magnet asset) has been delayed by just over a year, with construction now scheduled to start in the December quarter of 2027, versus the previous plan of September quarter 2026. Successful execution of its strategy would make Ramelius the third-largest Australian gold producer, and it would also have sector-leading margins of more than $460 an ounce given the Mt Magnet project’s position in the first quartile of the cost curve. In our view, the steep pull-back in the Ramelius stock price since early October is not commensurate with the improving fundamentals of its business, and the stock now screens even more attractively versus its peers, e.g. a price to net asset value multiple of 0.8x versus the 1.2x pricing of its peers.

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We anticipate outperformance on continued production growth, delivery of increased FCF, and organic news flow which could drive further upside.