How Good was the December Quarter for Ramelius Resources?

How Good was the December Quarter for Ramelius Resources?

The Ramelius Resources Ltd [ASX:RMS] share price has spiked today thanks to its strong performance in the final quarter of 2020.

The second half of 2020 was challenging for some of Australia’s largest gold miners, with their share prices giving up the considerable gains they made during the initial gold rally.

RMS shares dropped back to $1.685 per share in the last day of trade, coming off a 52-week high of $2.53.

Likewise, Newcrest Mining Ltd [ASX:NCM] shed about 30% off its share price coming off its 52-week high, and Northern Star Resources Ltd [ASX:NST] dropped about 20% between August and the end of 2020.

ASX RMS Share Price Chart - Ramelius Resources

Source: Tradingview

At time of writing the RMS share price is up 4.79% to trade at $1.86 per share.

Ramelius Resources beats production guidance

RMS released its final quarterly production update for 2020 today, beating its quarterly production guidance and half-year production guidance.

Gold production for the December quarter came in at 72,896 ounces, just above guidance of 67,000–72,000oz.

Half-year gold production weighed in at 144,240oz, beating guidance of 132,000–142,000oz.

Taking advantage of the historic gold price, RMS strengthened its balance sheet to AU$221.5 million and reduced debt to $8.1 million.

REVEALED: What’s Next for Aussie Gold Stock Prices? Learn more.

Meaning the company’s net cash position improved from $7.7 million to $213.4 million.

The movement in net cash and gold, excluding the dividend and stamp duty payments, showed an increase of $34.5 million over the quarter.

RMS paid its second ever dividend of 2 cents per share thanks to its strong financial performance, doubling the value of 2019’s dividend.

RMS said it continues to deliver gold into its forward sales book as the current schedule requires, with a quarter-end position of 229,750oz at an average price of AU$2,288/oz.

Not a bad price considering the fall in gold price through the last quarter.

How is 2021 shaping up for the RMS share price?

With coronavirus cases spiking around the world, the gold price has again been lifted as investors move back towards commodities.

In my opinion, even the relatively small clusters we’ve had in Australia have demonstrated the fragility of equities markets.

Even with a vaccine on the market — and an expected rollout in the coming months — financial markets could continue to be strained by the knee-jerk reaction of lockdowns every time the country records new COVID-19 cases.

Which, as we saw last year, can be to the benefit of the gold price and gold stocks.

Another factor that could influence the RMS share price is the emerging prominence of the Aussie gold scene. Our resident gold expert Shae Russell reckons other Aussie gold stocks could be set to spike too as Australia becomes the next ‘gold epicentre’. If you want to learn more, download your free report here.


Lachlann Tierney,

For The Daily Reckoning Australia