Thank you for standing by, and welcome to the Ramelius Resources September quarterly conference call. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Mark Zeptner, Managing Director. Please go ahead.
Thank you, Ashley. Good morning, everyone. Thank you for taking the time to dial into the Ramelius September 2023 quarterly conference call. As usual, our CFO, Tim Manners, is with me, although this may well be his last conference call before he moves on to another role. I'm also joined this morning by Ben Ringrose, who is our GM of Accounting. Welcome, Ben. Following the standard format for these calls, I'll run through the operational highlights for the quarter before handing the team to go through the financials. Once that is done, we will open the line for questions. As you will have seen, this morning, we reported gold production of 55,523 oz at an all-in sustaining cost of AUD 1,964 an ounce for the three months to 30 September.
Whilst we've previously flagged a softer start to the financial year due to mine sequence at Penny delivering increased volumes of development ore, the September quarter actually performed in accordance with our internal forecast, which has production effectively getting stronger over the course of the financial year. I have to say, it's great to see gold companies generally making money for investors, and for Ramelius to produce an operating cash flow of AUD 44.3 million and an underlying free cash flow of AUD 6.4 million from what we expect to be our lowest quarter for the year points to strong cash flows as we move forward. If we look to the December quarter, we are guiding for production of 60,000-70,000 oz, resulting in a first half guidance of 115,000-125,000 oz.
Second half should be significantly stronger again, with production forecast to come in between 135,000 and 150,000 oz, underpinning our original full-year production guidance of 250,000-275,000 oz. All-in sustaining guidance. Cost guidance has also been retained for the year, that is, at AUD 1,550-AUD 1,750 an ounce. As anticipated, we are seeing Mount Magnet reclaim the mantle as our flagship operation. Just over 30,000 oz produced at an all-in sustaining cost of AUD 1,817 for the quarter. You can see there the impact from the high-grade ore from Penny, albeit at lower volumes than expected for the rest of the year, has on the unit costs at Mount Magnet. By comparison, Edna May contributed 24,813 oz at all-in sustaining costs of AUD 2,196 for the period.
Costs at Edna May are expected to be positively impacted as more ore from our Symes open pit, which is a shallow, low-strip, medium-grade open pit, starts to feed into the mix. Haulage from Symes to Edna May did commence in September, and will ramp up over this current quarter. A total of 36,406 ore tonnes, grading 11.01 grams per tonne, was hauled from Penny to Mount Magnet during the September quarter, or a bit over 12,000 oz recovered. With quad road train movements at the anticipated rate throughout the period, accumulated stockpiles at the mine are sitting at what we would call normal operational levels, i.e., less than 1,000 tonnes. Moving on to resources and reserves.
We released in mid-September our annual statement, reported a Mineral Resource increase of 23% to 7.6 million oz. While all reserves have reduced slightly this year, it is worth adding that we have a significant number of Resource ounces that are the subject of mining studies in FY 2024, and hence the potential for conversion to reserves. Studies in question contain some 4.3 million oz of Mineral Resources. Not long after that, we also updated the Mineral Resource for Penny, adding 70,000 oz of high-grade material to a total of 320,000 oz, underlying the potential to extend life of the operation into FY 2026 via targeted resource development programs.
Underground diamond drilling continued through the September quarter of Penny, with more high-grade results received, including 3.3 m at 49 and 5 m at 23.5 g per ton. Other exploration highlights for the quarter include an intercept of 17.5 m at 3.9 from Bartus East, and a shallow hit of 9 m at 7.81 g per ton from AMT Target number 4 at Mount Magnet, one of several targets we have identified through the use of passive seismic, AMT, which is ambient noise tomography. I think I've asked this on a previous call. That's what AMT stands for. It's a geophysical technique we've employed to help identify more blind, intrusive, and a diorite-hosted deposits like Bartus.
For more information on exploration programs with our various projects, this can obviously be found in the quarterly itself. On the project side, the Galaxy Underground at Mount Magnet is progressing well, with mine development reaching the fifth ore drive and the new Mars decline, developing further at depth. Alongside Symes, which feeds into Edna May, the Galaxy Underground is one of the key capital projects for the company this year. And then moving over to the Eastern Goldfields at Roe, we started our first drilling program since taking ownership of the project, and drilling commenced again in September. We have a 14,000-m drill program of resource definition diamond drilling, aimed primarily at converting underground inferred resources into indicated at Bombora. Additional programs are planned that will infill areas around the planned open pits and feed into the mining studies currently underway. So that covers the highlights for me. I'll now hand over to Tim.
Thanks, Mark. Gold sales for the period, very similar to production at 55,614 oz, with an average realized price of AUD 2,752 an ounce, generating revenue of approximately AUD 153.1 million. As Mark mentioned, the operating cash flow from the business was AUD 44.3 million, from which AUD 27.7 million was invested in growth, capital, exploration, and resource definition. There was also a net payment of AUD 17 million for the acquisition of Musgrave Minerals, with a further AUD 2 million to be paid this quarter upon the completion of the compulsory acquisition process. The AUD 18 million in growth capital spent in the quarter was split largely between the Galaxy Underground and Brown Hill open pits at Mount Magnet, and the Symes open pit at Edna May.
While AUD 9.7 million was spent on exploration and resource definition in the quarter. The impact of the acquisition of Musgrave was the key reason behind the drop in cash and gold to AUD 259.2 million, from the AUD 272.1 million at 30 June. As Mark mentioned, while the financial and operational results are not as strong as those from the last quarter, they are still nonetheless, all better than our internal forecasts, which means we remain on track for the FY 2024 guidance for production, costs, and cash flow. We have no reason to doubt that FY 2024 will be a very strong year for RMS. The Aussie dollar spot gold price at 30 September was largely unchanged from 30 June, finishing at AUD 2,874 an ounce.
Since then, we have seen an increase in the Aussie dollar spot, spot price to above 3,100. The recent increase appears to have come from continued global, political, and economic uncertainty, leading to a shift back into the safe haven of US dollar gold, which has also been coupled with a weakening of the AUD. With a higher proportion of our production over the coming months being available for spot sales, this further enhances the cash flow potential of the business in the second half of this year. During the quarter, we continued to gradually run down our fixed-price contracts, delivering 30,000 oz into maturing contracts and replacing about 17,000 oz of these at an average price of $3,109 an ounce.
At the end of the quarter, forward gold sales consisted of 198,000 oz of gold at an average price of $2,831 an ounce over the period October 2023 to March 2026. On a final note, as touched on earlier, Ramelius's takeover for Musgrave Minerals closed on the fifteenth of September, with the company owning 91.37%, triggering compulsory acquisition of the outstanding shares, which were completed last week, excuse me. Musgrave marks the seventh corporate or project acquisition done in the last six years, providing Ramelius with a longer, higher-grade mine life at Mount Magnet, bolstered the mine life at Edna May, since that asset itself was acquired in 2017, and provided a number of project development options in a new exciting region for RMS east of Kalgoorlie.
Ramelius is one of the few companies that has truly played its part in the consolidation of the WA gold industry and created demonstrable value at the same time. On that note, I will sign off on what will be my 25th and last quarterly for Ramelius, and I will now hand you back to Ashley for questions. Thank you.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Andrew Hines with Shaw and Partners. Please go ahead.
Oh, hi. Thanks, guys. Good day, Mark, Tim. Hey, just a quick question on the cost. So the cost this quarter, obviously, well above your full-year guidance, which obviously as things improve through the second half and Penny becomes more of a contributor, those numbers will come down. Just a couple of things on that cost number, though. Tim, could you just explain the non-cash drawdown at Tampia, what the impact of that was? And, you know, is that- that's what I presume, just a one-off this quarter and won't be ongoing. And then secondly, just on the Penny costs, I think you've guided historically for Penny sort of operating just below AUD 800 an ounce, all-in sustaining. Given your early production from that and what you've seen, are those numbers still, you know, pretty much what you're thinking for Penny, or has cost of Penny gone up at all? Thanks, guys.
Hi, Andrew. Look, in terms of the non-cash component of the all-in sustaining costs, that's, as you point out, is driven by essentially the drawdown of stockpiles at Tampia. So in essence, as you know, the dollars have been spent putting that ore in place. So from a cash flow perspective, the spend is gone. But obviously, we still recognize the value, the carrying value of that ore as it goes through the mill. So it's not a one-off for the quarter. It will continue while there is Tampia material going through the mill. Indeed, it will also increase slightly, as we do the same for Marda. Slightly less in terms of dollar value and quantum, but the impact, if you like, is still technically the same....
And with Penny, yeah, look, there's no reason to think that, over the life, Penny will still be that sub $1,000 an ounce mark. It's, I suppose, where we are in the mine, as Mike mentioned, and the low grade, in quotation marks, of only 11 grams, is really sort of, it's not at its peak. We are still pushing forward with obviously the development and accessing the stopes. And when we get into the real sweet spot, you'll see those costs come down, at a pretty rapid rate. And as we mentioned, no reason from where we stand to change any of our cost forecasts in this year or indeed further out for those assets.
That's great. That's all I have, guys. Thanks.
Thanks, Andrew.
Your next question comes from Richard Hart with Tocqueville. Please go ahead.
Oh, thanks very much. Thank you both, Mark and Tim. Tim, good luck with your next venture. My question with the gold price, actually, because as everyone I'm sure is aware, jumping a couple of hundred AUD an ounce is significant. Is the Stage 3 at Edna May, like, constantly being reviewed? Or, you know, does this sort of change impact decision making on that, or is it too far away and too risky?
I'll go with that one, Richard. Hi again, it's Mark. Well, we don't constantly look at these projects. We decided to defer Stage Three earlier this year. I dare say we wouldn't all of a sudden bring a project out and dust it off on the basis of what I suppose has been a short-term bump in the gold price. But we'll probably look at it again in the new year, and we're just looking for some stability in that gold price and also in costs, because costs are still moving as well. You can't make a decision on something like Stage Three and the investment that's associated with that on what I'd call some relatively short-term movement in gold price. Look, we'll probably look at that again in the new year, and I think I've said that publicly previously.
Yeah, no, that's probably what I thought and seems quite sensible. Just what you touched on there, just quickly, I know you were just gently having a look at hedging with oil. Did that prove useful to you, or is it such a small program that it hasn't affected anything?
Richard, we have Tim here. Thanks for the earlier comment. We have hedged a fair, well, a fair bit of diesel from our perspective. I guess what I think people generally assume is that mining companies are seriously exposed to the diesel price. We're actually not too bad. We have done some hedging. I think we've got about 7, 7 or so million liters left. It has proved to be a good decision so far. We continue to assess it, but the thing that I guess to keep in mind is, as you know, as our haulage, particularly to Edna May, as that rate comes down, with Tampia and Marda complete, albeit we do have Symes for this year, our exposure becomes less and less. It's not a huge cost to us, particularly beyond FY 2024.
Okay, thanks very much.
Thanks, Richard.
Your next question comes from Paul Kaner with Ord Minnett. Please go ahead.
Hi, gents. Thanks for taking my questions. A couple here, if I may, and sorry if I missed this, but first question, just an accounting question on cash tax. AUD 2.3 million paid during the quarter. How should we sort of be thinking about cash tax for the remainder of FY 2024?
Paul, for the remainder of this year, I'm just looking for Ben for a nod or a shake, but we're due a refund from Breaker. We'll have our own tax bill, and broadly speaking, I think they'll offset, give or take AUD 1 million. Going forward, we do have access to more losses from some of these acquisitions, but they're relatively small. I would probably expect to see some cash tax payments or installments in FY 2025, maybe late 2024, but more likely 2025. What they will be will all be driven by what the revenue is and what our installment rates are. It's very difficult for us to determine exactly what they are and tell you now, but I would expect to see some cash tax payments, particularly begin again in FY 2025.
Yeah, that's great. No, that's what I was after. And then just secondly, on Musgrave and Cue, when can we sort of expect to get some study news flow on that? I understand it's still very early days with your hands on there, but how are you sort of initially thinking about this, and how quickly can that Cue material come through the mill?
Thanks, Paul. It's Mark. We're looking to bring Cue into the Mount Magnet production profile in early FY 2025, so a little earlier than 12 months from now. We actually have a plan to move. I mean, it's primarily an open pit project to move from the Eridanus open pit at Magnet and move the open pit team north to Cue at that point in time. So we are in the process of reviewing mining proposals, which were fairly advanced with the Musgrave team, to have all approvals meet that timeframe. So we're going pretty hard to get that into production sooner rather than later.
In terms of what that production profile looks like, along with everything else at Mount Magnet, I'd look to the new year to have a consolidated Mount Magnet, Cue, and Penny mine plan, if you like, to complete the picture.
And by new year, you mean sort of financial year, not, not calendar year there, Mark?
No, early calendar 2024.
Okay. Great. So that's it for me. Thanks, thanks very much, fellas.
Thanks, Paul.
Thanks, Paul.
Once again, if you wish to ask a question, please press star one on your telephone. We will now pause momentarily to allow questioners to enter the queue.
If there are no more questions, actually, if I could just wrap up, if I may please, with two additional points or two points in summary. First one, we, as explained, we expect the September quarter to be the softest of the financial year, albeit still featuring some free, positive cash flow. The production increasing from this quarter, and obviously cash generation is expected to increase along with this. Secondly, the Musgrave acquisition is complete and sold. All payments of consideration and issuance of all shares have completed. On that, thank you for listening in this morning. Enjoy the rest of your day.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.