Ramelius Resources output slump drags shares

Highlights:

• Ramelius Resources Limited (ASX: RMS) shares dropped 6.7% after reporting gold production of 55,013 ounces for the September quarter.
• The result marks a 25% decline from the previous quarter, mainly due to lower-grade ore processing and mine development activities.
• Despite the slump, the company maintained its full-year production and cost guidance at the time of writing, with investors eyeing recovery in the December quarter.

Gold producer hits 55,013oz in September quarter, shares fall 6.7%

Australian gold producer Ramelius Resources Limited (ASX: RMS) recorded 55,013 ounces of gold in output for the September quarter — representing almost a 25% decline from the prior quarter — with its shares falling 6.7% at the time of writing. The decline in output has raised fresh questions over the company’s ability to fully capitalise on recent strength in bullion prices, even as it maintains its full-year guidance.

Weaker output on grade and mix challenges

Ramelius attributed the quarterly fall in production to a combination of processing lower-grade stockpiles and focusing on development works ahead of ramp-up at its high-grade ore-body, rather than a major operational outage. While the company has previously flagged a shift to higher grade ore in the second half, the timing of that flow-through remains uncertain. The result comes in the context of easing gold prices globally, dropping from recent highs and putting additional pressure on miner margins and sentiment.

What’s next for Ramelius?

Despite the weaker quarter, Ramelius reiterated its full-year production target (≈ 300,000 ounces) and cost expectations (AISC around A$1,836/oz) at the time of writing. The key catalyst now is the ramp-up of its high-grade development pipeline and the potential to reverse the production slide. Investors will be closely monitoring the December quarter release for signs of recovery in both grade and volume. Until then, the company’s stock may continue to face downward pressure amid a tough operating climate for gold producers.

Implications for the market

Gold miners are particularly exposed when production dips coincide with softer bullion reference prices. For Ramelius, the downtick in output may reduce investor confidence and delay the expected margin upside from its high-grade projects. At the same time, the broader gold-sector pull-back adds another layer of risk for the company.

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