Mid-tier gold miner Ramelius (ASX:RMS) plans another boost in exploration spending in 2024-25 as it looks to confirm new reserves around its core Mount Magnet area in Western Australia.
In its annual reserves update filed with the ASX this week, Ramelius said it would spend between $40 million and $50 million this year on exploration work—up to double what it was two years ago.
Ramelius stated that its exploration work would be focused on Mt Magnet (including the Eridanus prospect), as well as Cue, Penny, and the Rebecca-Roe area.
This work is likely to see two prospects become serious mining projects in the next year.
"Significant increases in Ore Reserves are expected during FY25 due to Mineral Resource conversion at both the Rebecca-Roe and Eridanus projects,” Ramelius said.
The company reported that as of June 30, it had boosted resources at its various WA gold mining and exploration areas after record production in the year to June.
In total, it revealed mineral resources of 180 million tonnes at 1.5 grams of gold per tonne, for a total of 8.7 million ounces.
Total ore reserves were estimated to be 20 million tonnes at 1.6 grams of gold per tonne, for 1.1 million ounces. This includes indicated, inferred, and proven reserves—the latter being the most reliable.
According to Ramelius, it had measured reserves of 670,000 ounces of gold as of June 30, up from 530,000 ounces the year before; indicated gold reserves of 5.7 million ounces (up from 4.9 million the year before), and inferred reserves of 2.3 million ounces, up from 2.2 million the year before.
"Significant additional contribution from the Cue Gold Project was acquired in FY24, with additional conversion of Resources to Reserves expected in FY25 from the Break of Day Underground, and recent drilling is likely to also expand open pit designs,” Ramelius told the ASX.
The company said it expects "A Maiden Ore Reserve of 1.3Mt @ 2.1g/t for 87,000 oz for Bartus Underground."
It is also looking at the conversion of the FY24 Penny Mineral Resource extensions.
Mineral Resources yet to be converted to Ore Reserves include the following (in size order): Roe (1.8Moz) and Rebecca (1.4Moz), with a PFS due in the December 2024 Quarter, and Eridanus (1.2Moz) with underground/open pit studies due by December 2024.
However, it is sticking with its decision not to do more work at Edna May, leaving its estimated 1 million ounces as "a Resource only given the decision not to proceed” with future work.
The company is also sitting on a potential takeover play for Spartan Resources. It has spent around $185 million building an 18% stake and has more than $400 million in cash on hand.
The increased exploration budget will only cost a fraction of that sum, with the expected increases from the very high Australian gold prices over the next year.
