WEBULL

Does Weaker-Than-Expected Quarterly Gold Output Change The Bull Case For Ramelius Resources (ASX:RMS)?

Simply Wall St · 4d ago
  • In the past quarter, Australia's Ramelius Resources reported weaker-than-expected gold output across its Mt Magnet, Edna May, and Exploration segments, raising questions about operational performance.
  • This softer production outcome matters because it directly affects how reliably the company can convert its extensive gold assets into ongoing cash flow.
  • Next, we’ll examine how this weaker quarterly production update may influence Ramelius Resources’ investment narrative and expectations for operational execution.

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Ramelius Resources Investment Narrative Recap

To own Ramelius Resources, you need to believe the company can consistently turn its gold assets into cash flow while managing operational hiccups. The weaker quarterly production update tests that conviction in the short term, but on its own it does not yet appear to change the key near term catalyst, which remains execution across Mt Magnet and Edna May, or the biggest risk, which is a sustained period of operational underperformance rather than a single soft quarter.

The recent initiation and progression of dividends, including the fully franked 3.0 cents per share interim payout in early 2025 and the 8.0 cents total dividend for FY25, is particularly relevant here, because it links cash returns directly to the company’s ability to keep production and earnings on track. If weaker output at Mt Magnet and Edna May were to persist, the tension between funding growth, buybacks and maintaining these shareholder returns would become more apparent over time.

Yet behind the recent dividend and buyback announcements, there is an important operational risk that investors should be aware of...

Read the full narrative on Ramelius Resources (it's free!)

Ramelius Resources' narrative projects A$1.6 billion revenue and A$409.5 million earnings by 2028. This requires 10.9% yearly revenue growth and an earnings decrease of A$64.7 million from A$474.2 million today.

Uncover how Ramelius Resources' forecasts yield a A$4.33 fair value, a 4% upside to its current price.

Exploring Other Perspectives

ASX:RMS 1-Year Stock Price Chart
ASX:RMS 1-Year Stock Price Chart

Eight fair value estimates from the Simply Wall St Community span a wide A$1.68 to A$18.34 per share, underscoring how far apart individual views can be. Set against recent weaker production, this spread highlights why you may want to compare several opinions before deciding how reliable Ramelius’s current operations feel to you.

Explore 8 other fair value estimates on Ramelius Resources - why the stock might be worth less than half the current price!

Build Your Own Ramelius Resources Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.