Thank you for standing by, and welcome to the Ramelius Resources full year financial teleconference. 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, Chief Executive Officer. Please go ahead.
Thank you, Zach, and good morning, everyone. Thank you for taking the time to dial into our full year 2023 results conference call, alongside is Chief Financial Officer, Tim Manners, who will drill down into the numbers after I've covered off on the highlights. Now, there obviously has been a number of releases related to the full-year results loaded onto the ASX platform this morning. But Tim and I will be talking more broadly to the results presentation itself, so hopefully you do have that handy. Once we've got through that, there will be an opportunity for listeners to ask questions. So if we go to the presentation itself and start with slide three.
Slide three mainly shows you the flexibility we've built into our Western Australian operations over recent years, with four satellite mining operations now feeding into our two processing hubs at Mt Magnet and Edna May. We had expected to see Mt Magnet reclaim the flagship mantle in FY 2023 and contribute a larger proportion of ounces. But ultimately, the result was an even split between the two hubs once again. This was largely a result of the delays we saw ramping up ore haulage from the high-grade Penny underground mine to the Mt Magnet mill. If you look at the split we are forecasting for FY 2024, you'll see that Penny should push Mt Magnet ahead of Edna May in a material way this year.
Turning to slide four, we mined slightly less ore tonnes in FY 2023 compared to the previous year, at just over four million tonnes of ore, which was the primary reason for the 10% decrease in contained ounces mined. Now, it is worth noting, pointing out that FY 2022 was actually a record year for these two metrics, as shown, on the two charts on the right-hand side. Average head grade mined came in slightly higher than the previous year, at 2.17 grams per tonne, and this metric can be reasonably expected to improve throughout FY 2024, as Penny contributes a greater proportion of overall mill feed, and also given that Penny's grade is expected to be slightly lower in Q1 than the ensuing quarters, Q2 to Q4. We turn now to slide five.
We have our key production figures, as touched on, the delays in upgrading the Penny Haul Road and obtaining the necessary approvals affected our ability to get that high-grade ore through the Mt Magnet for processing right up until the last couple of months of the year. However, we were still able to make progress, producing just over 240,000 ounces at an all-in sustaining cost of AUD 1,895 an ounce, which, as we have seen, is a pretty competitive cost breakdown. All-in sustaining costs did increase 24% on the previous year, illustrating that, you know, we are not immune to the cost pressures felt across the industry. Although some of the increase in FY 2023 was offset by an 8% increase in the average realized gold price, which ended up at an average of AUD 2,091 per ounce.
Importantly, we saw our cost profile improve significantly in the June quarter as quad road train movements from Penny ramped up, and we expect that trend to continue through FY 2024. The expected reversal, referring to the chart on the bottom right, reversal from reducing margin to increasing margin, margin over all-in sustaining costs through FY 2024 and FY 2025, which should set us apart from many of our peers, is how we see the next couple of years. Before I hand it over to Tim, I'd also like to note that on just about every metric, these results show an improvement from last year, a significant achievement in light of ongoing cost pressures. The strong earnings and cash flow have enabled us to declare a fifth consecutive dividend, whilst we retain sufficient balance sheet capacity to fund future growth of both organic and inorganic varieties.
In short, the company is very well positioned as we move forward. On that, over to you, Tim.
Thank you, Mark. So moving to Slide six, we can see a snapshot of the key underlying results for the last financial year. To be clear, when we refer to underlying, we are essentially backing out the large non-recurring items in an attempt to communicate what we believe to be a more reflective result from the operations for the year and an appropriate comparative to the year before. I will, of course, discuss those one-off items shortly. Also, and for reference, we have provided a couple of appendices to this presentation, which look at some of the results in more detail and highlights trends over the past five years. So we achieved a top-line revenue of AUD 631.4 million from gold sales of 243,263 ounces.
Despite selling fewer ounces in FY 2023, the higher realized gold price drove a 5% increase in revenue compared to last year. The underlying EBITDA of 276.3 million represents a margin of 44%, which puts us right at the top of our peer group, a position we have proudly maintained for some time. The underlying NPAT of 75.3 million also represents an excellent return in a year that again presented its fair share of challenges in terms of keeping costs under control and, in our case, bringing Penny up to speed. I will discuss cash flow and our balance sheet strength in later slides, but importantly, the underlying cash flow of 33 million was after an investment of almost 190 million in growth projects...
which included the Penny and Galaxy Underground and the large Eridanus open pit at Mt Magnet. We saw a significant increase in cash and gold on hand to 272.1 million, with the addition of 75.1 million in cash that Breaker Resources held prior to our successful takeover, and a decent homemade cash generation, particularly in the June quarter. We see FY 2024 as another potentially very strong year of cash build, with continued high margin production from Penny, large amounts of cash released from the ROM stocks at Marda and Tampia, and a reduction in capital and development year-on-year to around 50 million- 60 million this financial year. Before we move on, it is important I briefly touch upon those key differences between underlying results and statutory results. There are two material items that make up the difference between the two.
The first is an impairment adjustment made to the Edna May Underground at 30 June. This was a result of water ingress events in Q, in Q4, which restricted access to the lower levels of the mine. We made an appropriate call at year-end to impair the costs incurred in developing those deeper levels in the mine, which came to approximately 6.8 million, or 4.8 million after tax. It is important to note that these water ingress events are not uncommon at Edna May. Indeed, the water ingress has had no impact on FY 2024 guidance, and furthermore, through July and August, our pumping capacity has increased, and we are confident in reaccessing those levels.
Also worth noting was that this was an asset-level impairment, adjustment, and that at a CGU, CGU level, there was no requirement for an impairment, which highlights the positive cash flows expected from the CGU group, which includes Tampia, Marda, Symes, and indeed, the Edna May Underground itself. The other material reconciling item from statutory to underlying results was a 7.1 million post-tax write-off of exploration ground, largely around Tampia, Marda, and Edna May. Moving to Slide seven, this simply shows the breakdown of underlying EBITDA across the two production hubs. As Mark alluded to, and, and as began to show out in FY 2023, although both hubs make significant contributions, Mt Magnet is beginning to distinguish itself again as the flagship of the business.
Flexibility of the hub-and-spoke model and the strict financial return criteria we use in assessing new opportunities, like the C ue Project, are key to maintaining that industry-leading EBITDA margin. Slide eight goes into more detail on the cash flows over the period, which we still believe is the single most important financial measure of our business. The organic business generated 223 million from operating activities last year, and after some significant reinvestment back in short- and long-term projects, we added a total of 103.2 million to our accounts, including the balance sheet acquired from Breaker. Turning to Slide 9, this underlines the strength of the Ramelius balance sheet.
We have excellent liquidity, with 272.1 million in cash and bullion, and around a further 145,000 ounces of gold contained in stockpiles and within circuits at Mt Magnet and Edna May at the end of June. We still have full access to an undrawn, fully committed 100 million debt facility, which is available for use if and when we see the opportunity to utilize, either for organic growth or M&A options. Pleasingly, our working capital position, which represents current assets less current liabilities, improved 77% to 293.1 million over the period. We continue to maintain what we see as a prudent approach for the hedge book, structuring it to strike a balance of cash flow certainty and spot price exposure.
At the end of June, we had forward sold 211,000 ounces at an average price of 2,772 an ounce, with delivery after December 2025. We expect this position to gradually reduce over FY 2024, with a material lift in the average price over that same time, too. Now, turning to Slide 10, we are proud of our track record with dividends. As a taxpayer, we believe this is an efficient way of returning capital to shareholders, and are now up to our fifth consecutive year of declaring a fully franked dividend. This year's fully franked payment of 0.02 a share represents a payout ratio of 30% of free cash flow and a grossed up dividend yield of 2.3%.
Looking at total shareholder returns, which takes in capital growth and dividend yield, we have averaged a very respectable 21.1% per annum over the past five years. Last year saw the establishment of a dividend reinvestment plan for the first time in the company's history, with 17% of shareholders opting to take up the opportunity to use their dividend proceeds to purchase additional RMS shares. That opportunity will be available again this year, with the price of shares to be calculated at a 2.5% discount to the 10-day VWAP from the date of election. Last year's dividend payment amounted to 7.2 million, which we saw in the cash flow chart previously, and this year we will return a total of AUD 19.8 million, which will be paid in October this year.
With that, I will hand you back to Mark. Thank you.
Thanks, Tim. If we can now refer to Slide 11, and our focus areas for FY 2024. We continue to strive for operational excellence by achieving reliability, managing costs, and continuing our improvements taken. We've shown our management team's adept in developing and operating both greenfields and brownfield sites, in both the underground and open pit mining scenarios. Our disciplined approach to capital management won't change. We're committed to retaining a strong balance sheet while recognizing that dividends, including the one announced today, are an integral part of Ramelius' investment proposition. We remain on the lookout for accretive acquisitions and made no secret of our desire to add a third production center. Again, we are maintaining discipline in this search, and we'll only move when the right opportunity presents....
Tim and his team are match fit, as we know, after completing six acquisitions in six years. If we get to the finish line with Musgrave, which we do remain confident of, that will be the seventh. On exploration, we have budgeted to invest another 30 million in exploration this year, with opportunities at Mt Magnet, Penny, and Rebecca/Roe Project area shaping up and delivering valuable resource ounces and bolstering reserves in the future. There are a number of near-term catalysts we see, including progress with exploration, drilling at Penny, Rebecca/Roe, and progress with mining study at Mt Magnet, sorry, and Rebecca/Roe. Finally, before we go to questions, with regards to our recommended takeover offer for Musgrave Minerals, this morning, we've gone unconditional after reaching over 47% acceptances.
I urge all Musgrave shareholders that are yet to accept the offer, and particularly those that wish to qualify for the dividend payment from Ramelius this year, to complete the acceptance forms or speak to their broker about doing so as soon as possible. There are administrative processes, largely outside of our control involved, that mean if shareholders do delay, then they may well miss out on receiving their Ramelius consideration ahead of the record date, which is Friday, the fifteenth of September. We have already declared the offer best and final, meaning it won't be improved unless a competing proposal emerges, which is unlikely at this stage of the process. That concludes the presentation. I'll hand back to the operator, Zach, to open the line for questions, please.
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 headset to ask your question. Your first question comes from Alex Barkley from RBC. Please go ahead.
Thanks. Morning, Mark and Tim. What kind of amortized cost occurred that was associated with the right of use assets? And would that be something comparable to your, your financing cash flow you have listed for lease payments? Thanks.
Alex, it's Tim. Do you mean the D&A component of what's classified as right of use assets?
Yeah, that's right. That it sort of has that cash equivalent thing with the recent accounting changes.
Yeah. Look, off the top of my head, I can't give you an exact answer. I would say it'd be reasonably comparable to what's in the cash flow. But I'd have to get back to you with an exact number.
Yep, no worries. Cheers. That'd be good. Thanks. All right. That was my only question. Thanks very much, guys.
Thanks, Alex.
Thanks, Alex.
Your next question comes from Richard Hart from Townsville . Please go ahead.
Good morning, Mark and Tim. Thanks again for a great year, but thanks even more for laying the groundwork for what looks like a brilliant year ahead. My question is actually about what you just mentioned, the acceptance of the offer. I've accepted the offer already, and I did it by ringing my broker, CommSec, which is very simple, and the shares were lodged that night. One reason I did that was because from May to October, my wife and I are lucky enough to live on Magnetic Island, and my redirected post doesn't arrive very quickly. I haven't even had the offer documents. So for me, CommSec accepting on my behalf is great.
But I've spoken to friends, and it seems to me that normal investors aren't aware that to avoid inadvertent mistakes filling the form or to not have to deal with Australia Post, sending the forms, that the broker will just do it very easily. So I just wonder if you can look at your figures and get some idea how many people go through the laborious task of filling the form and getting it to you, compared to the ones who are able to just ring the broker and accept?
Hi, Richard, it's Tim here. Thanks for the query. It's a difficult one to answer because as you'd appreciate, that's handled by Computershare. There are two, two parts in the day, one, where paperwork is received and collated, and the other, which is at the end of the day, when the CHESS holdings are crossed. It might be data we can get hold of. I will look into it. But you're right, if shareholders are lacking information, lacking paperwork, the best course of action is the broker, or indeed, Computershare themselves, or they can call us or our hotline. I'm sure we can help them out.
Yes, the reason I brought it up was, if you did find that a lot of people who were able to just call their broker are actually taking longer, maybe you could even promote that option, because I think reading the paperwork, it's heavily weighted towards filling the acceptance form. But look, I'll leave it with you. I appreciate everything you've done, and I'm hanging out to get my Ramelius shares. So thank you very much.
Thanks, Richard.
Thanks, Richard.
Your next question comes from Paul Turner from Ord Minnett . Please go ahead.
Yeah, too easy. Hi, gents. Thanks for taking my questions. Just a couple from me. Unfortunately, no accounting questions here. But firstly, on the Symes mine and the permitting status there. From memory, I was sort of just waiting on a minor haulage permit. Is that correct?
On Symes, pretty much. It's just final rubber stamping of haulage from the Shire of Yilgarn and Main Roads. But we think that that's still achievable this quarter. And in fact, we're actually starting to put ore onto the ROM pad, and doing some minor upgrades in the intersection of the bitumen road from the mine to the bitumen road. So we're not far away from achieving haulage commencement out of Symes, which is nice because very soft oxide to a soft feed, you know, between one and a half and two grams will go in, just basically on top of what we're currently putting in at Edna May.
Yep, that's great. Thanks for that. And then just on, on Edna May Stage three, the cutback there, I know that was sort of deferred earlier this year, but I'm just wondering if you've sort of seen any improvement in the operating environment for you to sort of revisit that idea?
Well, we're seeing a little bit of, a little bit of improvement. We've been pretty reluctant to call everything's back to normal, in that sphere. And I think it's probably a little early to revisit. It's probably something that we'd look again, maybe in the new year. Some things have leveled. You know, things like fuel, we were calling it come off, but then it sort of reversed again. So, we're probably not about to dust that off until the new year. I think it's too early to call a flattening or a drop in the cost environment, Tim?
Look, I agree with Mark and nothing else to add. I think that's right. I mean, there's early signs in some spots, but I'm not ready to call it just yet. But as Mark said, we'll have another look, probably early next year.
We also are progressing the permitting, the environmental work, which is, you know, related to TSFs, related to backfilling of, the Greenfinch pit. So that work's continuing on, and, you know, in readiness for Stage three to be mined at some point.
Yeah. No, understood. Well, that's it for me. Thanks very much.
Thanks, Paul.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Pause for a moment to allow further participants to register their question. There are no further questions at this time. I will now hand back to Mr. Zeptner for closing remarks.
Thank you. Okay, to wrap up, I would like to emphasize three points, if I may. One, today we announced a strong result for FY 2023, with improvement over FY 2022 in almost all areas. Two, an 0.02 fully franked dividend announced today is then the fifth consecutive year of dividend payments, which obviously includes the worst COVID period for us, and totals over 70 million returned to shareholders. And three, the Musgrave offer is now unconditional, as acceptance has approached 50%. And as we look to acquire control and beyond, re-emphasizing one last time that Musgrave shareholders are encouraged to accept without delay, if they are to participate in the immediate dividend distribution I have just mentioned. Thank you for listening in today. Enjoy the rest of your day.
That does conclude our conference for today. Thank you for participating. You may now disconnect.