ramelius resources limited (rms) · average price $2,135 $2,147 $2,094 $1,614 $1,847 $2,062...

TAYLOR COLLISON LTD. www.taylorcollison.com.au ABN 53008172450 AFSL 247083 1

MARK GORDON [email protected]

+612 9377 1500 www.taylorcollison.com.au

Ramelius Resources Limited (RMS) The Quiet Achiever

Our View Ramelius Resources Limited (ASX: RMS, “Ramelius”) has been the quiet achiever of the ASX-listed Western Australian gold producers, being a continuous producer since 2007, and now on track to produce over 250,000 ozpa from its 100% owned Mount Magnet and Edna May processing hubs. Recent growth has resulted in Ramelius entering the Top 20 of ASX-listed miners, and the Top 10 gold producers by market capitalisation. The Company has historically met or exceeded cost and production guidance, confirming the quality of management and confidence in the outlook for the Company. In addition, the Company has a history of increasing Reserves on a Y on Y basis, including through canny acquisitions, with examples being the Vivien Gold Project, and the take-over of Spectrum Metals (ASX: SPX, “Spectrum”), the owner of the high grade Penny Gold Project. which has provided the catalyst for the recent rerating. The rerating was also reinforced by the market’s positive response to the recently released FY2020 production results, and the updated Life of Mine Plan (“LoMP”). One factor that may have historically held the Company’s share price back has been having 3 to 4 years Reserves in advance, with some thinking this too low. However, time has shown that this has not been an impediment to growth. In valuing Ramelius and comparing with peers, we have used a revenue less AISC (approximates EBITDA) multiple. Our analysis of the larger ASX-listed WA gold miners shows that they trade largely at a multiple of between 8x and 12x. Using the Company’s FY2021 mid-point production and cost guidance, a multiple of 8x and a gold price of A$2,700/oz, we could expect, discounting unforeseen events, that the Company’s market capitalisation has the potential to reach A$2.4 billion in the medium term. This equates to a share price of A$3.00 using the current share structure. The Company’s market capitalisation and strong balance sheet also places it in an ideal position to execute value accretive acquisitions – such acquisitions could include current producers to provide Ramelius with a third processing hub, which would lead to a step change in production. This provides significant upside above what we see in current forecasts. Key Points • Consistent production growth – Ramelius has generally shown steady

production growth since operations commenced in 2006 , reaching 230 koz in FY2020, and forecast to be over 250 kozpa over the next four years at least.

• Consistently replacing Reserves – The Company has a history of increasing Reserves on a Y on Y basis

• Consistently meeting guidance – Ramelius has a history of consistently meeting guidance as to production and costs, which in our view highlights strong and rigorous management, and provides the market with comfort.

• Strong balance sheet – With current net cash and bullion of ~$160 million the Company is well funded to undertake currently planned development and exploration activities, as well as fund any other opportunities that may arise – we have seen a steady increase in cash over recent years.

• Strong outlook for gold – Global factors, including COVID-19, strategic uncertainty in the Asia-Pacific region, low interest rates and wholesale printing of money amongst other factors are resulting in a significant appreciation in the gold price, and hence the leveraged gold equities. We cannot see any significant change in the short to medium term.

• Experienced board and management – Company personnel have extensive technical and corporate experience in the gold mining sector.

17 August 2020

Recommendation: Buy

Summary (AUD) Market capitalisation (undiluted) $1,555m Share price (August 14, 2020) $1.93 Valuation per share (medium term) $3.00 52 week low $0.7625 52 week high $2.40 Cash and bullion (30/6/20) $185.5m Debt (30/6/20) $24.4m Ordinary shares (undiluted) 806.0m Performance rights 12.05m Fully diluted 818.0m Unlisted options (total) 0m Share price graph (AUD)

Directors & Management

Mr Kevin Lines Chairman Mr Mark Zeptner Managing Director Mr Michael Bohm Non-Executive Director Mr David Southam Non-Executive Director Dr Natalia Streltsova Non-Executive Director Mr Richard Jones Manager – Legal,

Company Secretary Mr Tim Manners Chief Financial Officer Mr Duncan Coutts Chief Operating Officer Mr Kevin Seymour GM - Exploration

Top Shareholders

Van Eck Associates 9.70% Ruffer LLP 8.00% Vinva Investments 4.05% The Vanguard Group 3.37% Top 20 37.59% Directors and Management 0.86%


Ramelius Resources Limited (RMS) 17 August 2020

Valuation and Peers Ramelius is one of the top 10 ASX-listed Western Australian gold producers by market capitalisation, as well as by production. The three largest companies with Western Australian production are Newcrest, Northern Star and Evolution, however with Newcrest and Evolution having the bulk of their production outside of Western Australia.

Table 1 presents an analysis of who we consider to be Ramelius’ peers, being mid-tier gold producers with production largely in Western Australia. We note that the three companies mentioned above are not included, as well as St Barbara, which has most operations outside of Australia.

The table includes:

• Company structure,

• Hedging summary,

• 2020 production and cost, including AISC margin analysis,

• 2021 production and cost guidance, including AISC margin analysis; and,

• 2019 Resources and Reserves.

Our view is that an effective valuation method for the larger miners is a multiple of the AISC margin (revenue less quoted AISC, which in effect approximates the EBITDA). This also allows for a comparison of relative valuations between companies throughout the year, with AISC and gold sales figures being given quarterly.

Although the AISC quoted by most companies includes some non-cash components, including inventory changes, the quantum of these varies from year to year, and they generally make little change on the overall numbers. As such we have not adjusted our figures for these non-cash components. Also, there is generally a minor difference between ounces produced (on which the AISC is calculated) and gold sold (on which the average selling price is calculated), however these difference in most cases are immaterial.

A traditional analytical tool is the trailing enterprise value (“EV”) to EBITDA multiple, which here we have changed to EV to AISC margin multiple for the FY2020 results. Although not traditional, we have also looked at the undiluted market capitalisation (“MC”) to AISC margin multiple.as another indicator, particularly for forecasting the market capitalisation without considering the EV given the uncertainty in future amounts of cash and debt.

Using the AISC margin for FY2020 (EBITDA has yet to be released), the following was calculated as of CoB on August 14, 2020:

• EV to AISC margin multiple average of 8.68, with a range of 6.01 to 12.06,

• MC to AISC margin multiple average of 9.43, with a range of 7.06 to 12.77,

• The EV to AISC margin multiple for Ramelius was 7.12, and,

• The MC to AISC margin multiple for Ramelius was 7.94.

This indicates that, for Ramelius’ peers, the MC to AISC margin multiple may make a relatively quick and, given the generally indicative nature of price forecasting, a reasonable forecasting tool.

We further tested this by analysing share price falls/appreciations following the release of the FY2019 results. The market capitalisation of five of the six companies analysed moved to within the range estimated (with an average of 9.99x), with the sixth being the largest underperformer, and which fell to a market capitalisation of ~7x AISC margin.

We have used this to provide a medium-term price forecast for Ramelius. this is predicated on an 8x MC to AISC margin multiple (close to the current multiple), an average Australian denominated gold price of $2,700/oz, forwards being delivered when due, and Ramelius meeting guidance. Any corporate action by the Company during the upcoming year will of course affect this.

This results in a base case medium term valuation of A$3.00/share. Sensitivity analysis indicates that there is a $0.16 change in share price for every $100 change in the Australian dollar gold price, and a $0.37/share change for each 1x change in MC to AISC margin multiple.



Table 1: Ramelius peer comparison (Source: IRESS, Company reports, Taylor Collison analysis)

Ramelius Peer Comparison Parameter Ramelius Silver Lake Saracen Regis Resources Gold Road Westgold

Code RMS SLR SAR RRL GOR WGX

Notes 50% Super Pit

share not included

Based on 50%

ownership, Jan to Dec FY

Structure and EV

On Issue 805.95 m 880.25 m 1,102.99 m 508.35 m 879.92 m 420.23 m

Last Price $1.93 $2.26 $5.61 $5.55 $1.73 $2.20

Market Capitalisation (m) $1,555 $1,989 $6,188 $2,821 $1,522 $925

Cash & Bullion (June 30, 2020, m) $186 $269 $369 $209 $109 $137

Debt (June 30, 2020, m)) $24 $0 $321 $0 $25 $0

Enterprise Value (m) $1,394 $1,720 $6,140 $2,612 $1,438 $788

Dividend/Share $0.01 FF $0.00 $0.00 $0.16 FF $0.00 $0.00

Note re Dividend FY2019, paid Oct 2019 Dec 19 interim of

$0.08/share

Hedging

Ounces 247,350 155,568 493,200 399,494 87,800 200,000

Average Price $2,135 $2,147 $2,094 $1,614 $1,847 $2,062

Production and Costs - 2020 FY2020 Gold Sales (includes other metal credits and quoted in AuEq) 230,426 263,362 520,414 353,230 115,295 235,169

Realised Gold Price/ounce $2,014 $2,132 $2,142 $2,200 $2,189 $2,088

Unadjusted AISC/ounce $1,164 $1,295 $1,101 $1,246 $1,155 $1,531

Unadjusted AISC Margin/Ounce $850 $837 $1,041 $954 $1,034 $557

Unadjusted AISC Margin (m) $195.86 $220.43 $541.75 $336.98 $119.22 $130.99

Unadjusted AISC Margin/EV 14.05% 12.81% 8.82% 12.90% 8.29% 16.63%

Unadjusted AISC Margin to EV Multiple 7.12 7.80 11.33 7.75 12.06 6.01

Unadjusted AISC Margin/ current MC 12.59% 11.08% 8.76% 11.94% 7.83% 14.17%

Unadjusted AISC Margin to MC Multiple 7.94 9.02 11.42 8.37 12.77 7.06

Production and Costs - FY2021 Guidance

Ounces - Midpoint 270,000 245,000 600,000 367,500 133,000 285,000

FY2020 - 2021 Production Growth 17% -7% 15% 4% 15% 21%

Assumed Revenue - 2021 $646.57 $607.25 $1,447.06 $883.65 $324.18 $692.94

Realised Price per Ounce 2021 inc Forwards $2,395 $2,479 $2,412 $2,404 $2,437 $2,431

AISC - Midpoint $1,280 $1,450 $1,101 $1,265 $1,200 $1,510

AISC Margin per Ounce $1,115 $1,029 $1,311 $1,139 $1,237 $921

Calculated AISC Margin (m) $300.97 $252.00 $786.46 $418.76 $164.58 $262.59



Parameter Ramelius Silver Lake Saracen Regis Resources Gold Road Westgold

Reserves and Resources - FY2019 Statement

Reserve Tonnes 15,000,000 7,072,000 52,000,000 112,900,000 46,690,000 31,558,000

Reserve Grade 1.80 3.70 2.00 1.11 1.24 2.58

Reserve Ounces 840,000 835,000 3,300,000 4,034,000 1,860,000 2,620,000

Resource Tonnes 81,000,000 39,395,000 160,000,000 263,300,000 80,410,000 130,841,000

Resource Grade 1.60 4.20 1.80 0.97 1.40 2.17

Resource Ounces 4,100,000 5,291,000 9,200,000 8,189,000 3,610,000 9,121,000

EV/Resource Ounce $393.17 $378.31 $724.91 $341.93 $431.29 $96.94

EV/Reserve Ounce $1,919.05 $2,397.17 $2,020.97 $694.12 $837.08 $337.47

2019 Reserves/2020 Production 3.65 years 3.06 years 6.34 years 11.42 years 16.13 years 11.14 years

2019 Resources/2020 Production 17.79 years 19.38 years 17.68 years 23.18 years 31.31 years 38.78 years



Company & Project Background & History

Background and Company History

Ramelius is a mid-tier Western Australian gold miner, which was first listed on the ASX in 2003, and which poured 230,426 koz of gold in FY2020 from the current Mount Magnet and Edna May processing hubs (Figure 1). Total production since FY2007 from all operations is in the order of 1.4 Moz of gold from 23.1 Mt of ore milled, for a recovered grade of 1.9 g/t Au.

A key plank to Ramelius’ strategy is the acquisition of, and restarting (or continuing operations) of what may be considered “tired” assets with processing plants from majors, and then being in a position to acquire other nearby assets that otherwise may be uneconomical or marginal to develop if they require a standalone plant to be constructed. Notwithstanding the above, the Company also has an active exploration programme, both brownfields and regional.

Figure 1: Project locations (Source Ramelius)

The Company’s first production was from the Wattle Dam Project in FY2007 (mining commenced in FY2006), with this initially being treated at a 3rd party facility, and then at the 100% owned, 160,000 tpa Burbanks plant (which was purchased in FY2007) located 8 km south of Coolgardie. Burbanks was subsequently sold to Maximus Resources for A$2.5 million in August 2016.

Between 2006 and 2015 production from these facilities was some 300 koz of gold. Ore was sourced and trucked from stockpiles, open cut and underground operations at the high-grade Wattle Dam mine (which in 2010 had a head grade of 25 g/t Au), and from open cut operations at the nearby Coogee deposit, which was acquired in FY2012, and mined/milled in 2014/2015.

In July 2010 a game changer for Ramelius was the acquisition of London listed Harmony Gold’s Mount Magnet property for ~A$40 million, with this including the 1.6 mtpa Checker plant (with capacity subsequently increased to ~1.9 mtpa) – mining commenced from the Galaxy area in September 2011, with the first gold poured in FY2012.

Acquisitions over the next few years included the Kathleen Valley and Vivien deposits, both within trucking distance of Mount Magnet. Kathleen Valley was mined in FY2016/17, with Vivien currently providing high grade underground feed to the Checker



plant. The Vivien operations involve a trucking distance of ~300 km (Figure 1), which is eminently doable given the grade of Vivien and the current gold price.

The next major acquisition was that of Edna May from Evolution Mining (ASX: EVN, “Evolution”) in October 2017, with this now the Company’s second main processing hub, and which has been instrumental in lifting gold production to over 200,000 ozpa. Edna May includes a 2.7 mtpa processing plant; however, this will decrease to 2.1 mtpa to allow for finer grinding of Tampia Hill ore once that deposit comes on stream.

Consideration for the Edna May acquisition was A$38.4 million in cash at hand plus the following:

• A$20 million in cash or Ramelius shares, or a combination of both, at Ramelius’ sole election, upon a Board approved decision-to-mine the Edna May Stage 3 open pit; and,

• Royalty payments of up to a maximum of A$30 million payable at A$60/oz from gold production over 200,000 ounces - (or up to A$50 million payable at A$100/oz if the Stage 3 open pit is not mined).

The Company is currently undertaking development studies on the Stage 3 expansion of the Edna May pit.

In January 2019, the Company acquired Explaurum Resources (ASX:EXU, “Explaurum”) at a price of one Ramelius share for every four Explaurum shares plus A$0.02/cash per Explaurum share. At the time of the updated bid (December 13, 2018) this valued Explaurum at A$0.134/share, for a total value of A$65 million. At the time Explaurum was in the process of advancing the Tampia Gold Project, which at the time had an MRE of 11.7 Mt @ 1.79 g/t Au (675 koz) and an Ore Reserve of 7.2 Mt @ 2.09 g/t Au (485 koz gold). This resulted in an acquisition price of ~A$97 per Resource ounce and ~A$134 per Reserve ounce.

Ramelius is currently undertaking pre-development activities at Tampia, with production estimated to commence in FY2022, and for ore to be trucked 148 km on sealed roads to Edna May.

Another Edna May satellite deposit, that is currently being mined (and trucked 191 km) is Marda (Figure 1), which Ramelius acquired from the administrators of Black Oak Minerals Limited (“Black Oak”) in early 2019. Consideration was A$13 million for JORC 2012 compliant Reserves of 2.07 Mt @ 2.3 g/t Au (151,000 oz), or A$86 per Reserve Ounce.

The most recent acquisition has been that of Spectrum Minerals (ASX: SPX, “Spectrum’) via an all scrip takeover in early 2020. The takeover value was in the order of A$275 million, or ~A$760 per ounce for the 360 koz contained in the high-grade Penny Resource of 800 kt @ 13.82 g/t gold. The Company is undertaking development studies on Penny, with first production expected in FY2022, with ore to be trucked ~200 km to Mount Magnet.

Figure 2 presents historic production for Ramelius, grouped by the processing hubs, namely Burbanks, Mount Magnet and Edna May. This highlights the generally steady growth in Company production, with production moving from Burbanks to Mount Magnet, and then with co-production from Mount Magnet and Edna May.

Figure 2: Annual gold poured by production centre (Source: Ramelius, TC analysis)



Resources and Reserves

One factor that some believe historically held back Ramelius’ share price is a perception that the Company had only had limited Reserves going ahead on a year by year basis. However, our analysis indicates that over the past 5 years Reserves as of June 30 have averaged around three times that of the following years’ actual production, with the multiple for Resources being 17 times. The Reserve multiple is actually similar to that of some peers.

Figure 3 shows historic Reserves, generally stated as of June 30 in the relevant year. Although there was a fall off in FY2014/15, these have steadily grown subsequently, partly from conversion of and discoveries of new Resources at existing operations and partly through strategic acquisitions. We see no reason why this will not continue into the future. Resource and Reserve statements are included as Appendix 1.

Although the 2020 Resource and Reserve statements are yet to be published, FY2020 depletion has already been replaced with the acquisition of Penny, with Ore Reserves of 230,000 oz estimated by the Company. Along with this acquisition, and due to the expected conversion of existing Resources, and the increase in the gold price over the past 12 months, we would expect the June 30, 2020 Reserve base to be significantly higher than the 843 koz as of June 30, 2019.

Another factor that should be be noted are the figures for Burbank when compared to actual production. Total published Reserves for Wattle Dam and Coogee were in the order of 100,000 oz, with the Burbanks facility ultimately producing ~300,000 oz of gold from these deposits. One key here was the nuggetty nature of the high grade Wattle Dam underground operations, which produced significantly more gold than estimated.

Figure 3: Published Reserves by production centre, generally as of at the end of the given financial year. Note that FY2020 figures are yet to be released (Source: Ramelius, TC analysis).

Gold Price and Currency Hedging

As at June 30, 2020, Ramelius’ forward gold sales were 247,350 ounces at an average price of A$2,135 over the period July 2020 to December 2022.

The Company’s policy is to have a hedge book covering an amount equal to one year’s production over the next three years production. The Company generally closes out forward sales as they fall due, and then to enter new contracts closer to the current spot price.

The Company currently has no currency hedging in place.



Guidance vs Actual

One factor that has characterised Ramelius is that production guidance has generally been accurate, with a conservative approach being taken to providing guidance. This is shown in Figure 4, which presents actual quarterly production vs the low and high guidance. Cost guidance over the long term is similarly accurate overall, however more variable, as shown in Figure 5.

This is an important point is analysing Ramelius, and in our view highlights good management and control of operations and costs, as well as rigorous Resource and Reserve estimation. This gives us confidence in using current Company guidance in forecasting the value appreciation potential of the Company (as discussed earlier in this report).

Figure 4: Actual production vs guidance (Source: Ramelius, TC analysis)

Figure 5: Actual AISC vs guidance (Source: Ramelius, TC analysis). Note that ranges for cost guidance were only introduced in September 2018, with guidance prior to that being a single value.

Dividend Policy

The Company paid a maiden full year dividend of A$0.01/share on 650 million shares in October 2019.

As announced at the 2018 AGM, the Company has a policy of paying a minimum dividend of $0.01/share, with a target maximum payout of 30% of free cash flow. Dividends will be subject to the Company maintaining a minimum cash and gold balance of A$50 million, and a reserve life of at least five years, with the quantum and timing of payments at the discretion of the Company.



Current Western Australian Gold Operations – Ramelius 100% This section will present a brief overview only of the Company’s operations – more detailed information (including on geology) can be found on the Company’s website and in releases.

Mount Magnet

Mount Magnet (Figures 1 and 6) is located on the Great Northern Highway 560 km NE of Perth, the capital of Western Australia, and is hence well served by transport and utility (including gas) infrastructure, including being located adjacent to the town of Mount Magnet.

Figure 6: Mount Magnet mining area (Source: Ramelius)

The project, which covers some 225 km2, has produced over 6 million ounces of gold since the discovery of gold in 1891, with the Hill 50 Gold Mine producing some 2.1 million ounces. At the time of its closure in 2007, Hill 50, at 1,500 m, was the deepest gold mine in Australia.

As mentioned earlier, Ramelius acquired Mount Magnet in 2010, and commenced operations in 2011 with a Reserve base of 545,000 ounces. The acquisition included the Checkers mill – a conventional CIL SAG mill with a current capacity of 1.9 Mtpa, however having previously been operated at 2.4 Mtpa. When first acquired, the mill was operated at ~1.6 Mtpa, however a reconfiguration of the mill liners increased this to the current 1.9 Mtpa.



As of the end of June 2020, the Checkers mill had treated ~14.9 Mt of ore to produce 879 koz of gold at a recovered grade of 1.83 g/t Au. Overall recoveries have been 93.8%. In addition to production from Mount Magnet itself, this figure includes production from several satellite mines, including Kathleen Valley, Blackmans, Western Queen South and Vivien, with the latter currently producing from a high-grade underground operation.

From 2011 to 2017 production was largely from large pit cutbacks in the Galaxy area, with this moving to the Cosmos area in 2018, complemented by smaller open cuts and the underground operations. During the June 2020 quarter open cut production was largely from the Eridanus pit (Figure 6), with the Company now undertaking the Stage 2 Eridanus pit cutback. In addition, a cut back at the Stellar pit reached the upper levels of a high-grade ore zone. Underground ore in the quarter was sourced from Hill 60, Shannon, and Vivien (Figures 1 and 6). The Company has stated that, due to nuggetty grades (including visible gold) mined grades at Shannon are exceeding Reserve grades.

Upcoming plans for Mount Magnet are discussed later in this report

Edna May

Edna May is located near the town of Westonia, located 10 km north of the Great Eastern Highway just over 300 km east of Perth in the Central Wheatbelt of Western Australia (Figures 1 and 7).

Figure 7: Edna May and regional projects (Source: Ramelius)



As mentioned earlier, Edna May was acquired from Evolution in 2017, with historical production of over one million ounces since first mining in the region in the early 1900s. This historical production included 570 kt @ 19.3 g/t from underground mining between 2011 and 1948 producing from high grade quartz reefs. Under Evolution’s ownership Edna May produced over 500,000 oz from the open cut. Production by Ramelius has been from the Stage 2 pit cut back, which was completed in 2018 to a depth of 250 m, and which has generated significant ore stockpiles which continue to be treated.

More recently ore has been mined from underground operations at Edna May as well as the nearby Greenfinch open cut and the Marda gold operation, the latter of which involves a 148 km haul (Figure 7).

The operation includes a 2.9 Mtpa conventional CIL gold plant, which comprises two stage crushing, SAG and ball mill, gravity circuit and leach. The total recovery for Edna May is in the order of 93%, with 50% of the gold being recovered by gravity.

Vivien

The Vivien underground operation is located near the town of Lienster, some 300 km by road from Mount Magnet (Figures 1 and 8). Underground development and mining commenced in FY2016, with this continuing to the present, providing blending ore to the Checkers mill.

Initial Reserves were 400 kt @ 7.9 g/t Au for 101 koz of contained gold, with operations initially due to be completed by the end of FY2019. However continuing Reserve expansions, including due to the early change of mine plan to include cemented rock fill floor pillars (which have allowed for 100% ore extraction) has extended the mine life to at least the end of FY2021, with ~35 - 40,000 oz expected to be produced in that year, similar to the FY2020 production.

The Company is currently undertaking further drilling to define additional Resources/Reserves to allow for mine life post FY2021.

Figure 8: Vivien long section looking west (Source: Ramelius)

Marda

Marda, which commenced development in FY2019 and production in FY2020 consists of a series of six open pits, with an initial Reserve (FY2019) of 1.1 Mt @ 2.50 g/t Au for 89 koz of contained gold and Resources of 4.6 Mt @ 2.00 g/t Au for 300 koz. This



provides high grade feed to the Edna May mill, and, along with Greenfinch, lessens the reliance on low grade stockpiles at Edna May.

Operations at Marda include stockpiling ore on site for trucking to Edna May, with a trucking capacity in the order of 750,000 tpa, which currently is in line with mining operations.

Life of Mine Plan and Development Projects On June 30, 2020, the Company released the LoMP Update, which sets out production plans to FY2028. This is predicated largely on existing Reserves, and some Indicated and Inferred Resources. The updated LoMP production and cost profile is shown in Figure 9, and includes some 1.45 Moz of production, 34% up on the 2019 LoMP update.

Figure 9: Updated LoMP production profile (Source: Ramelius)

Some points need to be noted:

• This is a conservative “baseline” plan based only on the current gold inventory and does not include any allowance for discoveries or acquisitions – the Company is actively seeking expansion opportunities (including through discovery and acquisition), and thus we would expect to see this expanded significantly in the future,

• Estimated minimum current Reserves, at ~840,000 oz (FY2019 Reserves less depletion plus Penny, and not considering any other additions during FY2020) provide over three years production in the LoMP,

• This is in line with previous years, where Reserves have been equal to ~three years production, • Baseline plans are to maintain a minimum production of 250,000 ozpa in the medium to long term, • The last three years in the LoMP (2026-2028) are largely treatment of stockpiles; and, • The Company is cogniscent of the potential for adverse market sentiment in, with higher gold prices, bringing in lower

grade production with the bad optics of higher costs.

Given the Company’s history of acquisitions and adding to Reserves, we would expect the “target extensions” as presented in Figure 9 to be filled, and also may expect the stockpile treatment as shown in 2026 to 2028 to be at least partly replaced by higher grade material.

The gold sector in Western Australia has been rapidly changing over recent years, with this including several discoveries, and with the change in gold price, deposits once considered uneconomic now becoming viable. This should provide a good opportunity for Ramelius to add to its gold inventory through acquisition, as well as through discovery and Resource conversion. As mentioned earlier the Company, with a strong balance sheet and market capitalisation, is in the position to acquire assets that would add a third (or even fourth) processing hub, thus leading to a step change in production.



This provides the opportunity for acquisitions using the balance sheet, and, given the current market and appreciating share prices, investors are also not averse to scrip bids, as shown by the Spectrum acquisition.

The Company has an active exploration programme, with planned FY2021 expenditure of A$25-30 million, and that for FY2022 – FY2025 of A$20-25 million per annum, with a total of A$135-175 million over the LoMP.

The LoMP considers current development projects, as well as options on continuing development of current producing assets. Estimated growth capital expenditure over the LoMP is in the range A$175-245 million, including A$55-65 million in FY2021.

At Mount Magnet these include:

• Ongoing Reserve replacement through exploration, • Development of the Penny Gold Project, with a Pre-Feasibility Study being completed and production expected in

FY2022 – there is the possibility to bring production forward, • Reserve additions to Vivien, • Assessing options at Eridanus, including a bulk underground operation, as well as extensions to the nearby Shannon

underground operations and assessing the underground potential at Stellar, • Assessing the underground potential of the Galaxy area and Morning Star; and, • Undertaking a cost/benefit analysis on increasing the mill throughput to 2.4 Mtpa.

At Edna May activities include:

• Comparing the potential for a bulk underground operation vs the current plan of mining the high grade lodes, largely Fuji and Jonathon; and,

• Revisiting the planned Stage 3 cutback of the Stage 2 pit – this has the potential to unlock 500,000 oz of gold and provide an additional 10 years production from the Edna May pit.

In addition, production from Tampia is planned to commence in FY2022 – this will require capital in the order of A$7.5 million to be spent on the Edna May mill, and finer grinding which will reduce the mill capacity.

A few of the development projects are discussed below.

Edna May Underground

Figure 10 presents a long section through the Edna May depositt, highlighting the presence of steeply plunging high grade lodes within a lower grade envelope.

Figure 10: Edna May section looking south (Source: Ramelius). Note – Resources have been updated since this figure was published.



Resources have been updated since this figure was published – as of June 30, 2019, high grade lode Resources stood at 330,000 t @ 6.9 g/t Au for 73,000 oz contained gold, within the lower grade envelope of 26 Mt @ 0.9 g/t Au for 720,000 oz contained gold.

As mentioned above, the Company will compare options, including the current lode only underground mining, bulk underground mining and the Stage 3 pit cutback.

Penny Gold Project

The recently acquired Penny Gold Project has the potential to provide significant high grade ounces to the Mount Magnet mill, both from a cutback of the existing Penny West pit (only ~2,000 oz), and then from the Penny North underground operation as shown in Figure 11.

The Company has recently competed a PFS on Penny, which has indicated a final production of 230 koz from 584 kt of ore, at an AISC of A$703/oz and an upfront capital cost of A$23.5 million. The Study was predicated on a process recovery of 92%, however metallurgical test work has indicated that recoveries of up to 96% should be achievable.

Also of note is that the Study is based on Penny North – there could be the potential for additional underground production from Penny West, as well as down plunge exploration potential from both lodes.

Figure 11: Penny long section looking west (Source: Ramelius)

Eridanus

The Company is currently undertaking the Stage 2 pit cutback at Eridanus (Figure 12), with stockwork and vein controlled mineralisation hosted within a vertical granodiorite. Stage 1 production was in the order of 110,000 oz from a 130 m deep pit, with Stage 2 expected to produce another 110,000 oz from taking the pit down to 230 m depth.



Given the presence of significant gold below the planned floor of the Stage 2 pit, Ramelius is looking at underground mining options. These may include bulk mining, or more selective mining of quartz vein-sets that have been mapped in the pit floor, and that will be included in updated geological and Resource modelling.

Figure 12: Eridanus section looking west (Source: Ramelius)

Exploration

The LoMP allows for a total of A$135 – A$175 million exploration expenditure, maintaining a history of concerted exploration, including brownfields and greenfields. The Company holds significant prospective exploration ground in the vicinity of all projects, with the potential to add to existing Resources and Reserves.

More details of exploration can be found in Company releases.

Board and Management

Kevin Lines, BSc (Geology), MAusIMM, MAICD – Independent Non-Executive Chairman Mr Lines has extensive experience in mineral exploration and mining for gold, copper, lead, zinc and tin and has been a director since 2008. Mr Lines brings to the Board his extensive experience in the assessment and evaluation of exploration projects and development of properties and mining operations overseas.

Mr Lines was appointed Independent Non-Executive Chairman following the passing of Inaugural Chairman, Bob Kennedy. Mr Lines is Chairman of the Due Diligence Committee and member of the Nomination and Remuneration Committee.

Mark Zeptner, BEng (Hons) Mining, MAusIMM, MAICD – Managing Director

Mr Zeptner has more than 20 years’ experience in senior operational and management positions associated with major gold and nickel assets in Australia and offshore and has been a director since 2015.

Mr Zeptner is the Company’s Chief Executive Officer.



Michael Bohm, B.AppSc (Mining Eng.), MAusIMM, MAICD – Independent Non-Executive Director Mr Bohm is a graduate of the WA School of Mines and has been a director since 2012. Mr Bohm brings to the Board his extensive experience as a mining professional with extensive corporate and operational management skills in the minerals industry in Australia, South East Asia, Africa, Chile, Canada and Europe.

Mr Bohm is Chairman of the Nomination and Remuneration Committee and member of the Audit and Risk Committee.

David Southam, B.Comm, CPA, MAICD – Independent Non-Executive Director

Mr Southam is a Certified Practicing Accountant with more than 25 years’ experience in accounting, capital markets and finance across the resources and industrial sectors. Mr Southam has been intimately involved in several large project financings in multiple jurisdictions and has completed significant capital market and M&A transactions.

Mr Southam is Chairman of the Audit and Risk Committee.

Natalia Streltsova, MSc, PhD (Chem Eng), GAICD, MSME, MCIM – Non-Executive Director

Natalia Streltsova is a PhD qualified Chemical Engineer with + 25 years’ minerals industry experience, including over 10 years in senior technical and corporate roles with mining majors – WMC, BHP and Vale. She has a strong background in mineral processing and metallurgy with specific expertise in gold and base metals.

Dr Streltsova has considerable international experience covering project development and acquisitions in Africa, South America and in the countries of the Former Soviet Union.

Richard Jones, B.Comm, LLB, FINSIA (Grad Dip), BA (Hons) Pol Sci/Econs – Manager – Legal & Company Secretary Mr Jones joined Ramelius in October 2018. He has more than 20 years’ experience as a corporate commercial lawyer in both private and in-house capacities and across various industries. He has also served as company secretary for ASX listed and unlisted companies in the mining sector.

Tim Manners, BBus (Accounting), FCA, AGIA, MAICD – Chief Financial Officer

Mr Manners is a finance professional with over 20 years experience in accounting, corporate finance and financial management functions in the resources industry. Mr Manners has been involved in exploration, developing and producing companies both in Australia and overseas.

Mr Manners has held the senior financial position in companies within the precious, base and bulk commodities sectors, including Gold Road Resources Ltd, Phoenix Gold Ltd, Bathurst Resources Ltd and Perilya Ltd. Mr Manners joined Ramelius Resources Limited in July 2017 and is a Fellow of the Institute of Chartered Accountants in Australia and New Zealand.

Duncan Coutts, BEng (Hons) Mining, MAusIMM, MAICD – Chief Operating Officer

Mr Coutts is a qualified mining engineer with more than 20 years resource industry experience. He holds a Bachelor of Engineering (Hons) in Mining Engineering from the Western Australian School of Mines in Kalgoorlie. Recently he has been providing technical and operational consulting services to iron ore and gold focused mining companies.

Prior to this consulting work, Duncan was CEO of the privately owned iron ore producer Kimberley Metals Group, located in the Kimberley region of Western Australia. Mr Coutts has also held positions of General Manager – Development with ASX listed Galaxy Resources Ltd, Chief Development Officer with ASX listed Metals X Ltd, and Chief Operating Officer for Harmony Gold Australia where he was responsible for the management and project development of operations in Western Australia, Northern Territory and Papua New Guinea.

Kevin Seymour, BSc (Geology) MAusIMM, MAIG – General Manager - Exploration

Mr Seymour graduated with a BSc (Geology) from UWA in 1984 and has over 30 years’ experience in mineral exploration spanning Australia, North America, Argentina and the Pacific Islands. He has held Principal Exploration Geologist positions with Ashton Gold, Delta Gold and Sons of Gwalia before becoming Exploration Manager of Glengarry Resources in 2004 and General Manager of Exploration for Ramelius Resources in 2009.

Highlights throughout his career include being an integral team member for the discovery of Delta Gold’s Lady Ida Operations and the high grade Mulgarrie gold mine north of Kanowna Belle.

During his time at Sons of Gwalia Kevin worked on the Gwalia Deeps Gold Project at Leonora and more recently with Ramelius has successfully led the exploration and acquisition team that has helped revitalise the fortunes of the Company’s flagship Mount Magnet Gold Operations.



Risks There are risks associated with investments in gold mining companies. Key risks that apply to Ramelius are presented below.

• Operational risk – This is the key technical risk that has the potential to affect gold producers, and thus returns to shareholders. Adverse outcomes can come through either bad management affecting operations, else unexpected events initially outside the control of management.

• Reserve definition risk – To continue to increase, or at least to maintain production, a gold producer needs to, and ideally continually increase Resources and Reserves. This can be through several ways, including acquisition, conversion of existing Resources and discovery amongst others. Failure to do so will lead to decreasing future value in the Company.

• Gold prices and currency rates – Being valued on, and leveraged to the gold price, Australian domiciled gold producers are affected, both positively and negatively, by changes in the Australian denominated gold price, which includes both the US dollar price and the AUD/USD exchange rate. On the downside this can have a double whammy, by both decreasing the received price per once, as well as decreasing the ounces produced due to downgrade of Reserves. However, the opposite will occur on the upside.



Appendix – Mineral Resources and Ore Reserves (Source: Ramelius)

Mineral Resources (not including Penny)

Project Deposit

t g/t oz t g/t oz t g/t oz t g/t ozGalaxy Group 92,000 1.8 5,400 4,100,000 1.6 220,000 2,300,000 1.3 96,000 6,600,000 1.5 320,000 Morning Star 4,900,000 1.9 300,000 4,300,000 1.5 210,000 9,200,000 1.7 510,000 Bartus Group 49,000 2.2 4,000 110,000 2.1 8,000 240,000 1.6 12,000 400,000 1.9 24,000 Boomer 1,200,000 1.8 68,000 790,000 1.0 26,000 2,000,000 1.5 94,000 Britannia Well 180,000 2.0 12,000 180,000 2.1 12,000 Bullocks 200,000 3.3 21,000 40,000 2.5 3,000 240,000 3.1 24,000 Eastern Jaspilite 150,000 2.2 10,000 120,000 2.8 11,000 130,000 2.5 11,000 400,000 2.5 32,000 Eclipse 170,000 2.2 12,000 41,000 2.1 3,000 210,000 2.2 15,000 Eridanus 2,800,000 1.3 120,000 690,000 1.1 23,000 3,500,000 1.3 150,000 Golden Stream 150,000 2.9 14,000 67,000 1.2 2,700 220,000 2.4 17,000

Mt Magnet Lone Pine 490,000 1.3 21,000 390,000 1.7 21,000 870,000 1.5 42,000 Milky Way 1,400,000 1.3 58,000 880,000 1.1 30,000 2,300,000 1.2 88,000 O'Meara Group 180,000 2.5 14,000 230,000 1.7 12,000 410,000 2.0 27,000 Spearmont-Galtee 25,000 2.9 2,000 210,000 4.3 28,000 230,000 4.0 30,000 Stellar 380,000 2.1 26,000 380,000 2.1 26,000 Welcome - Baxter 220,000 1.6 11,000 280,000 1.6 15,000 200,000 1.8 11,000 700,000 1.7 37,000 Open Pit deposits 510,000 1.9 30,000 17,000,000 1.7 920,000 11,000,000 1.4 480,000 28,000,000 1.6 1,400,000 Hill 50 Deeps 280,000 5.5 49,000 930,000 7.0 210,000 400,000 6.4 81,000 1,600,000 6.6 340,000 Hill 60 200,000 4.4 28,000 160,000 4.3 22,000 360,000 4.3 50,000 Morning Star Deeps 190,000 4.2 26,000 330,000 5.0 53,000 530,000 4.7 79,000 Saturn UG 1,600,000 2.5 130,000 1,600,000 2.5 130,000 Shannon 330,000 5.9 63,000 290,000 4.2 39,000 620,000 5.1 100,000 UG deposits 280,000 5.5 49,000 1,700,000 6.1 330,000 2,800,000 3.6 320,000 4,700,000 4.6 700,000 ROM & LG stocks 1,500,000 0.7 33,000 1,500,000 0.7 33,000 Total Mt Magnet 2,300,000 1.5 110,000 18,000,000 2.1 1,200,000 13,000,000 1.9 810,000 34,000,000 2.0 2,200,000 Edna May 21,000,000 0.9 580,000 5,100,000 0.8 130,000 26,000,000 0.9 720,000 Edna May UG 310,000 6.9 70,000 12,000 6.7 2,700 330,000 6.9 73,000

Edna May Greenfinch 2,700,000 1.1 94,000 1,700,000 1.1 60,000 4,400,000 1.1 150,000 ROM & LG stocks 1,700,000 0.5 25,000 1,700,000 0.5 25,000 Total Edna May 1,700,000 0.5 25,000 24,000,000 1.0 750,000 6,800,000 0.9 200,000 32,000,000 0.9 970,000

Viv ien Viv ien UG 370,000 5.8 68,000 41,000 3.9 5,100 34,000 2.9 3,100 440,000 5.4 77,000 Mossbecker 110,000 2.6 8,900 120,000 3.4 13,000 230,000 3.0 22,000

Kathleen Yellow Aster 91,000 3.8 11,000 300,000 2.0 18,000 390,000 2.4 30,000 Valley Nil Desperandum 23,000 5.8 4,400 100,000 2.9 9,500 120,000 3.5 14,000

Total KV 220,000 3.4 24,000 520,000 2.5 41,000 750,000 2.7 66,000 Coogee Coogee 31,000 3.6 3,600 65,000 3.3 7,000 96,000 3.4 11,000

WesternQueen WQ South 100,000 3.6 12,000 81,000 3.4 8,800 180,000 3.5 21,000 Symes Symes Find 400,000 1.9 24,000 150,000 2.1 10,000 540,000 1.9 34,000

Dolly Pot 560,000 1.7 31,000 44,000 1.7 2,300 610,000 1.7 34,000

Dugite 250,000 1.9 15,000 250,000 1.9 15,000

Python 760,000 1.9 47,000 170,000 1.8 10,000 940,000 1.9 57,000

Marda Goldstream 100,000 2.5 8,300 130,000 1.4 5,900 230,000 1.9 14,000

Golden Orb 370,000 3.0 35,000 190,000 1.8 11,000 560,000 2.6 46,000

King Brown 130,000 4.3 18,000 41,000 1.9 2,600 170,000 3.7 21,000

Die Hardy 1,100,000 1.6 54,000 450,000 1.5 21,000 1,500,000 1.6 75,000

Red Legs 370,000 2.9 34,000 370,000 2.9 34,000 Total Marda 3,200,000 2.0 210,000 1,400,000 2.0 87,000 4,600,000 2.0 300,000

Tampia Tampia 390,000 2.4 31,000 7,700,000 1.7 420,000 130,000 1.8 7,400 8,200,000 1.7 460,000 4,700,000 1.6 240,000 54,000,000 1.6 2,700,000 22,000,000 1.6 1,200,000 81,000,000 1.6 4,100,000

Figures rounded to 2 significant figures. Rounding errors may occur.Total Resource

MINERAL RESOURCES AS AT 30 JUNE 2019 - INCLUSIVE OF RESERVESMeasured Indicated Inferred Total Resource



Ore Reserves (not including Penny)

Penny Mineral Resources

t g/t oz t g/t oz t g/t ozBoomer 130,000 2.9 12,000 130,000 2.9 12,000 Brown Hill 620,000 1.6 31,000 620,000 1.6 31,000 Eridanus 3,100,000 1.1 110,000 3,100,000 1.1 110,000 Golden Stream 95,000 3.0 9,200 95,000 3.0 9,200 Milky Way 200,000 1.2 7,800 200,000 1.2 7,800 Morning Star 1,100,000 1.9 68,000 1,100,000 1.9 68,000

Mt Magnet Stellar 170,000 2.7 15,000 170,000 2.7 15,000 Vegas 180,000 1.3 7,500 180,000 1.3 7,500 Total Open Pit 5,600,000 1.4 260,000 5,600,000 1.4 260,000 Hill 60 240,000 3.2 25,000 240,000 3.2 25,000 Shannon 290,000 5.1 48,000 290,000 5.1 48,000 Total Underground 530,000 4.3 73,000 530,000 4.3 73,000 ROM & LG stocks 1,500,000 0.7 33,000 - - - 1,500,000 0.7 33,000 Mt Magnet Total 1,500,000 0.7 33,000 6,100,000 1.7 330,000 7,600,000 1.5 360,000 Edna May UG 420,000 4.7 63,000 420,000 4.7 63,000 Greenfinch 1,700,000 1.2 62,000 1,700,000 1.2 62,000 ROM & LG stocks 1,700,000 0.5 25,000 - - - 1,700,000 0.5 25,000

Edna May Total 1,700,000 0.5 25,000 2,100,000 1.9 130,000 3,700,000 1.3 150,000 Vivien Vivien UG 220,000 6.2 44,000 - 220,000 6.2 44,000

Dolly Pot 300,000 1.7 16,000 300,000 1.7 16,000 Dugite 170,000 2.0 11,000 170,000 2.0 11,000 Python 320,000 2.2 22,000 320,000 2.1 22,000

Marda Goldstream 71,000 2.6 6,000 71,000 2.6 6,000 Golden Orb East 64,000 4.2 8,600 64,000 4.2 8,600 Golden Orb West 140,000 2.7 12,000 140,000 2.7 12,000 King Brown 75,000 5.3 13,000 75,000 5.4 13,000 Marda Total - - - 1,100,000 2.5 89,000 1,100,000 2.5 89,000

Tampia Tampia 170,000 3.7 20,000 2,000,000 2.7 180,000 2,200,000 2.8 200,000

3,600,000 1.1 120,000 11,000,000 2.0 720,000 15,000,000 1.8 840,000 Figures rounded to 2 significant figures. Rounding errors may occur.

Total Reserve

ORE RESERVE STATEMENT AS AT 30 JUNE 2019

Project Mine Proven Probable Total Reserve

Project Deposit

t g/t oz t g/t oz t g/t ozPenny North 360,000 21.2 240,000 61,000 13.0 26,000 420,000 20.0 270,000

Penny Penny West 43,000 7.2 9,800 47,000 6.1 9,400 90,000 6.6 19,000 Magenta 19,000 4.0 2,500 92,000 2.5 7,300 110,000 2.7 9,800

422,000 19.0 252,300 200,000 6.6 42,700 620,000 15.0 298,800 Figures rounded to 2 significant figures. Rounding errors may occur.

Total Resource

PENNY MINERAL RESOURCES AS AT 30 JUNE, 2020 - INCLUSIVE OF RESERVESIndicated Inferred Total Resource



Penny Ore Reserves

t g/t oz t g/t oz t g/t ozPenny North UG - - - 490,000 15.0 230,000 490,000 15.0 230,000 Magenta OP - - - 12,000 4.0 1,500 12,000 4.0 1,500

500,000 14.0 230,000 500,000 14.0 230,000 Figures rounded to 2 significant figures. Rounding errors may occur.

Total Reserve

Penny

PENNY ORE RESERVE STATEMENT AS AT 30 JUNE, 2020

Project Lode Proven Probable Total Reserve



Disclaimer The following Warning, Disclaimer and Disclosure relate to all material presented in this document and should be read before making any investment decision. Warning (General Advice Only): Past performance is not a reliable indicator of future performance. This report is a private communication to clients and intending clients and is not intended for public circulation or publication or for the use of any third party, without the approval of Taylor Collison Limited ABN 53 008 172 450 (“Taylor Collison”), an Australian Financial Services Licensee and Participant of the ASX Group. TC Corporate Pty Ltd ABN 31 075 963 352 (“TC Corporate”) is a wholly owned subsidiary of Taylor Collison Limited. While the report is based on information from sources that Taylor Collison considers reliable, its accuracy and completeness cannot be guaranteed. This report does not take into account specific investment needs or other considerations, which may be pertinent to individual investors, and for this reason clients should contact Taylor Collison to discuss their individual needs before acting on this report. Those acting upon such information and recommendations without contacting one of our advisors do so entirely at their own risk. This report may contain “forward-looking statements”. The words “expect”, “should”, “could”, “may”, “predict”, “plan” and other similar expressions are intended to identify forward-looking statements. Indications of and guidance on, future earnings and financial position and performance are also forward-looking statements. Forward-looking statements, opinions and estimates provided in this report are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Any opinions, conclusions, forecasts or recommendations are reasonably held at the time of compilation but are subject to change without notice and Taylor Collison assumes no obligation to update this document after it has been issued. Except for any liability which by law cannot be excluded, Taylor Collison, its directors, employees and agents disclaim all liability (whether in negligence or otherwise) for any error, inaccuracy in, or omission from the information contained in this document or any loss or damage suffered by the recipient or any other person directly or indirectly through relying upon the information. Disclosure: Analyst remuneration is not linked to the rating outcome. Taylor Collison may solicit business from any company mentioned in this report. For the securities discussed in this report, Taylor Collison may make a market and may sell or buy on a principal basis. Taylor Collison, or any individuals preparing this report, may at any time have a position in any securities or options of any of the issuers in this report and holdings may change during the life of this document. Analyst Interests: The Analyst holds no Ramelius shares or options. At the time of writing of this report Principals and Staff of Taylor Collison collectively held 0.14% of the issued capital of RMS or approximately 116,000 shares. These holdings may change during the life of this document. Analyst Certification: The Analyst certifies that the views expressed in this document accurately reflect their personal, professional opinion about the financial product(s) to which this document refers. Date Prepared: August 17, 2020 Analyst: Mark Gordon Release Authorised by: David Cutten

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