Ramelius Resources Limited

This report is an updated version of the report published on 02 August 2022 at 3:55 PM GMT.

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Ramelius Resources Limited (ASX: RMS) is engaged in the production and sale of gold, mine development and exploration. RMS owns and operates the Mt Magnet, Edna May, Vivien, Marda, Tampia and Penny gold mines in Western Australia.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders: The top 10 shareholders together form ~34.50% of the total shareholding. Van Eck Associates Corporation and Dimensional Fund Advisors, L.P., holds a maximum stake in the company at ~10.78% and ~5.00%, respectively.

1.4 Key Metrics:

During 1HFY22, the company recorded a net margin of 23.7% against 4.9% of the industry median. In addition, it recorded a return on equity of 10.3% as compared to 4.1% of the industry median. Below captured the trend of cash cycle days and the debt-to-equity ratio. 

Section 2: Financial Highlights and Production Summary

2.1 Insights of 4QFY22:

2.2 Production Summary:

The company has experienced growth of over 20% YoY in gold production from FY15 to FY21. In addition, the increased AISC showcases the cost pressure due to inflation & COVID-related impacts. However, RMS possesses a healthy Sales/AISC margin of 37% for FY22. Below highlighted the gold production trend from 1QFY22 to 4QFY22.

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

4.2 Fundamental Valuation

Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is August 2, 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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