CONTINUED
GROWTH
REFLECTS OUR
STRATEGY IN
ACTION
CORPORATE
DIRECTORY
DIRECTORS
Kevin Lines – BSc (Geology), MAusIMM, MAICD (resigned 30 September 2020)
Independent Non-Executive Chairman
Mark Zeptner – BEng (Hons) Mining, MAusIMM, MAICD
Managing Director and Chief Executive Officer
Michael Bohm – BAppSc (Mining Engineering), MAusIMM, MAICD
(acting Chair from 1 October 2020)
Independent Non-Executive Director
David Southam – B. Com, CPA, MAICD
Independent Non-Executive Director
Natalia Streltsova – MSc, PhD (Chem Eng), GAICD (appointed 1 October 2019)
Independent Non-Executive Director
COMPANY SECRETARY
Richard Jones – BA (Hons), LLB
CHIEF FINANCIAL
OFFICER
CHIEF OPERATING
OFFICER
GENERAL MANAGER –
EXPLORATION
PRINCIPAL REGISTERED
OFFICE
SHARE REGISTRY
Tim Manners – BBus (Accounting), FCA, MAICD
Duncan Coutts – BEng (Hons) Mining, MAusIMM
Kevin Seymour – BSc (Geology), MAusIMM
Level 1, 130 Royal Street
East Perth WA 6004
+ 61 8 9202 1127
Computershare Investor Services Pty Limited
Level 5, 115 Grenfell Street
Adelaide SA 5000
1300 556 161 (within Australia)
+ 61 3 9415 4000 (outside Australia)
AUDITOR
Deloitte Touche Tohmatsu
Tower 2, Brookfield Place
125 St Georges Terrace
Perth WA 6000
STOCK EXCHANGE
LISTING
Ramelius Resources Limited (RMS) shares are listed
on the Australian Securities Exchange (ASX)
WEBSITE
www.rameliusresources.com.au
TABLE OF CONTENTS
Key Operational Highlights for the Year
Chairman’s Report
Managing Director’s Report
Review of Operations
Overview
Operational Summary
Mt Magnet
Edna May
Development & Exploration Projects
Resources and Reserves
Company Summary
Mineral Resources
Ore Reserves
Competent Persons
Sustainability Report
2020 Achievements
About Ramelius
Our Business
Our People
Our Communities
Our Environment
Performance Data
Annual Financial Report
Directors’ Report
Auditor’s Independence Declaration
Income Statement
Statement of Comprehensive Income
Balance Sheet
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
02
06
08
12
13
14
15
18
19
24
24
25
27
28
30
32
35
41
44
48
51
55
58
60
81
84
84
85
86
87
89
137
138
143
1
Annual Report 2020
KEY OPERATIONAL
HIGHLIGHTS FOR THE YEAR
Acquisition of the Penny Gold Project
(Spectrum Metals Limited) on 17 March 2020
The Penny Gold Project currently has a Mineral Resource of 300,000oz
and an Ore Reserve of 230,000oz helping Ramelius extend the Life of
Mine Plan by
34% to 1.45Moz.
Commencement of mining operations at the
Marda Gold Project
The Mining Proposal and Mine Closure Plan for the Marda
Gold Project were approved in September 2019.
A total of
449k tonnes
were mined in the financial year at a grade of
1.78 g/t for
25,656oz
of contained gold.
As at 30 June 2020 a total of 276k tonnes of ore
was stockpiled at site awaiting haulage to Edna May
for processing.
2
Ramelius Resources
Commencement of mining operations at the
Greenfinch open pit (Edna May)
Clearing Permit application for the Greenfinch open pit project, adjacent to
the Company’s Edna May gold operations in Western Australia granted on
3 October 2019.
Received the final Federal Controlled Action environmental approval
to proceed with the project on 28 January 2020.
Ore mining commenced in March 2020. A total of
117k tonnes were mined in the financial year at a grade of
0.89 g/t for 3,380oz of contained gold. Mine performance
has been in line with the mine plan and grades are expected to increase as the
pit reaches depth.
Annual Report 2020
3
OUR CORPORATE
STRATEGY
• Actively seek to grow
production beyond 300koz pa
• Maintain mine life beyond five
years through exploration
and acquisition
OUR MISSION
44
Ramelius Resources
Ramelius Resources AND WE WILL
DO THIS BY
1. Securing a third production centre
2. Establishing a suitable organisational structure
3. Leveraging high gold price to convert more
Resources to Reserves
4. Further embedding Company culture and
consistency across the business
OUR VALUES
At Ramelius Resources, we are defined by the
following core values:
Our culture is defined by a ‘fit for purpose and
can-do’ attitude.
5
Annual Report 2020 CHAIRMAN’S REPORT
DEAR FELLOW SHAREHOLDERS,
It is my great pleasure to report that Ramelius Resources Limited
has continued to record very strong growth both financially and
operationally in the financial year ended 30 June 2020.
The Company reported:
• Net profit before tax of $149.5 million;
• Net Profit after tax of $113.4 million;
• Gold sales of 228,210 ounces generating revenue of
$460.6 million and;
•
Cash and gold (net of debt) at 30 June 2020 of $161.1 million.
Each of these results are records for Ramelius and reflect the
excellent underlying operational performance and the focussed
financial management across our multiple mining operations. These
achievements are all the more impressive when considered in light
of the restrictions placed on the Company by the global COVID-19
pandemic. The response of the Ramelius team to the coronavirus
outbreak has been outstanding, firstly ensuring the safety of our
workforce, whilst allowing the almost seamless continuation of mining
operations.
OUR PROJECTS
At Edna May, 315km east of Perth, permitting delays for the
commencement of open-pit mining at Greenfinch resulted in a
reduction in available mill feed and a subsequent cutback of processing
operations for a portion of the year. The successful resolution of the
permitting issues has allowed operations to return to full capacity and
it is a credit to all of our team for achieving a very pleasing outcome to
what were very taxing issues. The Marda operations, located 170km
north-northeast of Edna May, and acquired in the 2019 financial year,
were brought into production during the year with multiple open-pits
providing important higher-grade feed to the Edna May mill. Similarly
the Edna May underground mine has continued to perform strongly
with output increasing during the year whilst development has advanced
at depth and deeper drilling has been undertaken to define the full
potential of this resource. At the Tampia Hill project, near Narembeen,
240km east of Perth, our efforts have been directed at advancing
our understanding of the optimum development pathway, with the
Company looking forward to operations commencing in 2021.
Exploration has continued during the year over our
strategic landholding, to the south of Edna May, with
encouraging results continuing to be returned, particularly
in the region of the Symes’ Find deposit.
It has been an excellent year at Mt Magnet where the
team continued to deliver on both the operation and
exploration fronts. The Eridanus open pit formed the
backbone of production feeding the Mt Magnet mill and
performed above expectations throughout the year. At
the same time drilling at depth below the initial pit defined
substantial additional Resources that have supported an
increased Reserve and deeper final pit. Exploration focus
at Eridanus has now turned to studying the potential for
a bulk-mining underground operation after completion of
the open-pit. The lower-grade, baseload, mill feed from
Eridanus has been complemented by excellent grades and
tonnages from the new Shannon underground mine.
At our Vivien underground mining operation near Leinster,
work has focussed on establishing the access to deeper
levels of the mine following last year’s approval to extend
mine life.
SPECTRUM METALS LTD TAKEOVER
In a bid to maximise the ongoing financial performance
of the Company’s assets at Mt Magnet, your Company
launched a takeover offer for Spectrum Metals Limited
(Spectrum) in February 2020. The primary asset of
Spectrum was the high-grade Penny project, located
150kms south-east of Mt Magnet. This exciting Resource
provided the opportunity for significant additional high-
grade feed to the Mt Magnet mill, improving financial
returns and extending overall mine life. With the
unanimous support of the Spectrum Board the takeover
was completed by 23 June 2020, a result that reflects
very positively on the developing corporate M&A
skills at Ramelius.
6
Ramelius Resources
LIFE OF MINE PLAN
STEPPING DOWN
Subsequent to the end of the financial year, the Company
announced that I will be standing down as Chairman
and resigning from the Board of Ramelius effective
30th September 2020. It has been my privilege to have
served on the Board over the last 12 years and to have
been witness to the evolution of Ramelius from a mining
minnow to its current standing as a respected mid-tier
Australian gold company. My decision to retire has been
made for both personal and professional reasons but I
believe it is in the best interests of Ramelius and allows
for the continuing Board renewal that I consider is a
prerequisite to further corporate growth.
I take this, my final opportunity, to thank our employees
and contractors for their continuing efforts during the past
year. I also would like to particularly thank our Managing
Director, Mark Zeptner and the management team, as
well as my fellow Non-Executive Directors, Mike Bohm,
David Southam and Natalia Streltsova.
On behalf of the Board, I also thank all of you, our
shareholders, for your ongoing support and wish you all
the very best in the year ahead.
Kevin Lines
Chairman
Ramelius Resources Ltd
The combination of these Exploration, Corporate and Mine
optimisation efforts has culminated during the year with the release,
in June, of the Company’s revised Life of Mine plan. This plan identifies
over 1.45M ounces of gold and forecasts production from our dual
operating centres, to be in excess of 250,000 ounces per annum over
at least the next four years followed by continuing solid production for
a further two years. These results are very significant for the Company
and are a credit to a great many employees and contractors across
our operations.
EXTENDED CAPACITY
The efforts of your Company have been appreciated by the market
with a growing recognition, not just of the capability of our team
to continuously deliver on forecasts, but the expanding capacity of
Ramelius to action growth initiatives in a timely and cost-effective
manner. As a result, in the period 1 July 2019 to 30 June 2020;
•
Ramelius share price appreciated 176%.
• Market Capitalisation appreciated 236%;
• Market Capitalisation (at A$1.99/share) had risen to A$1.6 billion.
Subsequent to the year end and following the September Quarter
Rebalance of the S&P/ASX indices, Ramelius was, for the first time,
included in the S&P/ASX200. This is a particularly important event in
the Company’s history and strengthens our appeal within the broader
investment community.
DIVIDENDS
On the back of the Company’s financial performance in the 2020
financial year it is pleasing that the Board has been able to approve the
payment of a fully franked dividend of 2.0 cents per share. This payment
doubles the dividend paid to shareholders in the 2019 financial year and
represents a payout ratio of 12% when compared to Basic Earnings Per
Share of 16.4 cents.
Your Board remains focussed on continuing to grow your investment in
the Company by prudent use of capital on exploration, asset acquisition
and corporate activities. In parallel with these initiatives Ramelius
will continue to monitor an often rapidly changing external business
environment to ensure the Company retains the necessary skills to
manage change at all levels within the organisation.
Annual Report 2020
7
MANAGING
DIRECTOR’S REPORT
DEAR FELLOW SHAREHOLDERS,
It is with a certain sense of satisfaction that I look back on the
achievements of the 2020 financial year. Not only was it the most
successful year in Ramelius’ history from an operational and financial
point of view, further important steps were taken to ensure the
Company continues to represent one of the standout investment
choices amongst mid-tier Australian gold producers.
On the operational front, Ramelius delivered record full-year gold
production of 230,426 ounces from our Mt Magnet and Edna May
production centres, aided in no small part by the June 2020 Quarter
in which we produced 86,517 ounces, beating our original guidance
for the Quarter by more than 16,000 ounces.
Coming as it did in a period of stronger gold prices and with typical
Ramelius diligence applied to keeping costs under control, the record
full-year production result translated into a record net profit after tax
of $113.4 million, a 420% improvement on the prior year.
This helped ensure the balance sheet was in sturdy health at the end
of the year. With the Company carrying $185.5 million in cash and
bullion and $24.4 million in debt at 30 June whilst having met the
necessary criteria, we were able to declare a fully franked dividend
of 2.0c per share.
PENNY GOLD PROJECT
Leading a dividend-paying gold miner is a particular source of pride for
me and I am confident that we are currently striking the right balance
between returning funds to shareholders and ensuring that sufficient
capital is available to fund exploration and project development and to
act on any potential acquisition opportunities as they arise.
With regards to the latter, we again demonstrated our willingness
to move on the right opportunity in February when we made a
recommended takeover offer for Spectrum Metals Limited, owner of
the Penny Gold Project, one of the highest grade undeveloped gold
assets in Australia.
The development of Penny Gold Project, which is located 150km
south-east of our Mt Magnet operations, is expected to begin in the
September Quarter next year. First production is scheduled for late in
financial year 2022, although there is a possibility that we will be able to
compress the project timeline and bring that date forward.
The Pre-Feasibility Study (PFS) completed on the Penny
Gold Project in June demonstrated that the project will
deliver significant cashflows to the Company. Based on the
PFS, the mine should produce an initial 230,000 ounces at
an all-in sustaining cost of just A$703 an ounce. We hope
to add substantially to the life of the project through
further exploration.
MINE PLAN
Other milestones on the project development front
included the start of mining at Marda, completion of the
Tampia Feasibility Study delivering a major reduction in
upfront capital, the approval of a significantly larger open
pit development at Eridanus and after a lengthy wait and
much negotiation with the state government, receipt of a
Clearing Permit for the Greenfinch open pit at Edna May.
These projects were all factored into the updated Mine
Plan, released to the market at the end of June, which
details the production of 1.45 million ounces of gold
across eight years to financial year 2028. In total, this is
34% higher than the previous plan published in June 2019
and another example of the progressive growth that the
Company has been able to deliver.
PRODUCTION GOALS
At present, we are guiding for production of 260,000-
280,000 ounces of gold at an AISC of A$1,230-1,330
an ounce in the 2021 financial year, which would again
be a record.
With the aim of extending our production profile out
further, there are multiple studies underway looking at
converting more of our large resource base into mineable
reserves. These include examining bulk underground
mining options at Eridanus, Galaxy and Morning Star, all at
Mt Magnet, as well as re-visiting the large Stage 3 open pit
cutback at Edna May. We are also exploring the prospect
of expanding the processing plant at Mt Magnet.
8
Ramelius Resources
A PROSPEROUS FUTURE
It has been gratifying to see the strong operating
performance and clearly articulated growth strategy meet
with increasing recognition from investors over recent
years. From 1 July 2019 to 30 June 2020, the Ramelius
share price rose from 72c to $1.99, with the Company’s
market capitalisation increasing to $1.6 billion.
The upward trend in the share price continued early in
the new financial year and we were pleased to receive
notification recently that Ramelius would be included
in the S&P/ASX200 at the September 2020 Quarterly
Rebalance. Inclusion in the index is expected to lead to
broader investor recognition.
In reflecting on the achievements of the past year, it
would be remiss of me not to acknowledge the efforts of
Ramelius staff and contractors. They navigated through the
uncertainty that came with the COVID-19 pandemic with
aplomb and deserve great credit for the operational and
financial outcomes we have been able to deliver.
SUMMARY
On a final note, I would again like to express my gratitude
to Kevin Lines, who retired as Chairman at the end of
September after 12 years of continuous service on the
Ramelius Board. The integral role Kevin has played in the
success of the Company will never be forgotten and I am
extremely grateful for the support he has provided me
personally over the past two and a half years since he took
over the chairmanship. We all wish Kevin, and his wife
Heather, all the best in retirement.
I thank you as well for your ongoing support of Ramelius
and I look forward to another year of significant
achievements ahead.
Mark Zeptner
Managing Director
Ramelius Resources Ltd
Key Financial
Highlights
10+
years
AS A SUCCESSFUL
GOLD MINER
230,426
ounces
OVER THE YEAR
$19.8
million
SPENT ON EXPLORATION
$113.4
million
NET PROFIT AFTER TAX
Annual Report 2020
9
THANK YOU FOR A
DECADE OF SERVICE
Kevin Lines – Outgoing Chairman
2008
April Appointed
to Board of
Ramelius
May Recommenced
open pit mining at
Wattle Dam
Drilling identifies
very high grade
underground
potential
2009
April/ Raised $13.4
May million and
committed to
underground
mine at
Wattle Dam
June Joe Houldsworth
retires as MD
Ian Gordon
appointed CEO
July Dioro
Exploration
takeover
announced as
counter-bid to
Avoca Resources
2010
Feb Ramelius reached over
37% in Dioro then
accepted into
the Avoca offer
Sale of Avoca shares
raised $20 million
July Purchased Mt
Magnet from
Harmony for
$35 million (plus
$5 million in
environmental
bonds)
Oct Ian Gordon
appointed MD
2011
April Approval to
commence
mining at Mt
Magnet
June Joe
Houldsworth
retires from
Board
Beach Energy
sell their stake
in Ramelius held
since the float
2012
Feb Announced
$10 million
acquisition of
Vivien from
Gold Fields
Transaction
completed
September 2013
Mar Mark Zeptner
appointed COO
Aug Reg Nelson
resigns as a
Director
Oct Michael Bohm
joins Board as
Non-Executive
Director
Board members Mike Bohm, Mark Zeptner, Kevin Lines and
David Southam on-site.
10
Ramelius Resources
2014
Mar Mark Zeptner
2015
May Vivien
2017
Sept Discovery
2018
Mar Bob Kennedy
2019
Feb
appointed CEO
replacing Ian
Gordon
June Acquisition of
commences
mining and
Kathleen Valley
given go-ahead
Kathleen Valley
for $4.1 million
announced
July Mark Zeptner
joins the Board
as MD
Sept Ian Gordon
resigns from
Board
of Shannon
Underground
Deposit at
Mount Magnet
Oct Acquisition
of Edna
May from
Evolution for
$40 million
plus royalties
Dec Discovery
of the
500,000 oz
Au Eridanus
Deposit
at Mount
Magnet
passes away
Kevin Lines
appointed
Chairman
July David Southam
joins the
Board as
Non-Executive
Director
Sept Takeover of
Explaurum
Limited
(ASX:EXU)
announced
Offer to
acquire Marda
announced
Office
consolidation in
Perth completed
EXU takeover
reaches 90%
(for approx.
$67M)
Marda purchase
completed (for
approx. $13M)
Aug First Dividend
payment to
shareholders
under
new policy
announced
Oct Natalia
Streltsova
joins Board as
Non-Executive
Director
2020
Feb
Spectrum
Metals
Limited
(ASX:SPX)
takeover
announced
May SPX bid
completed for
$171 million
Sept Ramelius
enters S&P/
ASX200 Index
Kevin Lines
retires
11
Annual Report 2020
REVIEW OF
OPERATIONS
Overview
Operational Summary
Mt Magnet
Edna May
Development & Exploration Projects
13
14
15
18
19
12 Ramelius Resources
OVERVIEW
Ramelius is an established mid-tier ASX200 gold production
and exploration company. Ramelius achieved record annual
gold production for the financial year of 230,426 ounces and
has averaged production of in excess of 200,000 ounces per
annum over the last three financial years.
Ramelius had a remarkable year reporting a 397% increase in earnings
before interest and tax (EBIT) compared to the 2019 financial year.
The reported EBIT for the 2020 financial year was $152.5 million
(2019: $30.7 million). This performance has been driven by increasing
grades across the operations (notably at Mt Magnet) and a strong A$
gold price. In addition to the strong EBIT the operating cashflows also
reported a significant increase of 72% to $236.0 million. Further details
on the financial performance of the group for the 2020 financial year
can be found in the financial review section of the Directors’ Report.
Production guidance for the 2021 financial year has been set at
260,000 – 280,000 ounces which, if achieved, will be another record
year for Ramelius. Furthermore, a life of mine plan was released on
30 June 2020 which detailed annual gold production averaging over
250,000 ounces out to the 2025 financial year. This represents a 25%
increase in the average annual production and an extension of two
years on the prior year life of mine plan.
Figure 1: Ramelius’ operations locations
Annual Report 2020
1313
Annual Report 2020 REVIEW OF OPERATIONS
OVERVIEW (CONTINUED)
As noted, during the 2020 year the
company produced a record 230,426
ounces from its Mt Magnet, Vivien,
Edna May, and Marda gold mines at
an All-In Sustaining Cost (AISC) of
A$1,164 per ounce. This is the 6th
consecutive year the group’s AISC
has been below A$1,200 per ounce
(refer Figure 2).
Sales for the year totalled 228,210
ounces at an average realised gold
price of A$2,014 generating a strong
AISC margin of A$850 per ounce.
Figure 2: AISC per ounce and realised gold price for 2015 to 2020
OPERATIONAL SUMMARY
Table 1: Mine operations performance for the 2020 financial year
1In the below table and throughout this report Mt Magnet includes the Vivien gold mine whilst the Edna May operation includes the Marda Gold Project.
Unit
Mt Magnet1
Edna May1
2020 Group
2019 Group
Change
Change %
kt
g/t
oz
kt
g/t
oz
kt
kt
g/t
oz
%
oz
oz
oz
2,940
1.30
122,844
502
5.84
94,270
566
1.60
29,036
139
4.86
3,506
1.35
151,880
641
5.63
21,758
116,028
2,576
1.26
104,530
337
5.04
54,591
930
0.09
47,350
304
0.59
61,437
+ 36 %
+ 7 %
+ 45 %
+ 90 %
+ 12 %
+ 113 %
3,442
705
4,147
2,912
1,235
+ 42 %
1,973
2.74
173,622
96.5
167,507
167,129
2,262
0.99
71,697
91.2
65,360
63,297
4,235
1.80
245,319
94.9
232,867
230,426
4,804
1.33
205,921
94.8
195,264
196,679
(569)
0.47
39,398
0.1
37,603
33,747
- 12 %
+ 35 %
+ 19 %
+ 0 %
+ 19 %
+ 17 %
163,696
64,514
228,210
203,318
24,892
+ 12 %
Open Pit
High grade ore mined
Grade
Contained gold
Underground
High grade ore mined
Grade
Contained gold
Total ore mined
Mill Production
Tonnes milled
Grade
Contained gold
Recovery
Recovered gold
Gold poured
Gold sold
14
Ramelius Resources REVIEW OF OPERATIONS
MT MAGNET
Figure 3: Mt Magnet key mining and exploration areas
MINING
Operations at Mt Magnet continued on a multi pit / underground basis throughout the 2020 financial year with ore being
milled from five open pit and four underground projects. A summary of the main projects for the year is provided below:
Area
Milky Way
Type
Open Pit
Operational commentary
Mining at Milky Way was completed during the year with 371k tonnes mined at a grade of 1.24 g/t.
A total of 409k tonnes were milled during the year at a grade of 1.24 g/t for recovered gold of
15,409 ounces.
At the end of the year there remained just over 400k tonnes of high grade Milky Way ore
stockpiled, which is comparable to the opening stockpile position. The higher grade Eridanus ore
was preferentially treated during the year.
Stellar
Open Pit
Spectacular drill results in the prior year led to a redesign of the mine plan for Stellar.
Mining of the redesigned pit commenced in March 2020, later than expected, with operations
focussing on Eridanus. By the completion of the year the Stellar pit cut back had advanced to reach
the upper levels of the high grade ore zone.
A total of 52k tonnes were mined at a grade of 1.11 g/t with the main ore body scheduled to be
mined early in the 2021 financial year. A minimal amount of ore was processed from Stellar (and
Stellar West) during the year with the higher grade Eridanus and Shannon ores being preferentially
treated.
15
Annual Report 2020 REVIEW OF OPERATIONS
MT MAGNET (CONTINUED)
MINING
Area
Eridanus
Type
Open Pit
Operational commentary
Eridanus was the main ore source at Mt Magnet during the year making up 49% of the ore feed.
The Eridanus open pit performed exceptionally well during the year with production overperforming
against the Ore Reserve in both tonnages and grade.
Extensive RC drilling was undertaken in the first half of the year, which, in December, resulted in a
226% increase in the Mineral Resource reported in 2018 for Eridanus. (refer to ASX Announcement
dated 23 December 2019 “Major resource increase at Eridanus (Mt Magnet)”).
Following on from this, a new open pit Ore Reserve of 5.2 million tonnes at 1.20 g/t for 194,000
ounces of gold was announced in April 2020. (refer to ASX Announcement dated 30 April 2020
“Ramelius Life of Mine Update”).
This Ore Reserve upgrade has allowed for a significantly larger open pit mine to be designed with a
Stage 2 pit cut-back commencing in July 2020.
Total high grade ore mined for the year was 2,306k tonnes at a grade of 1.33 g/t. The Eridanus high
grade ore was preferentially treated throughout the year due to the higher grades being available. A
total of 960k tonnes were milled at a grade of 1.90 g/t and recovery of 94.9% for recovered gold of
55,553 ounces.
At the end of the year there was 1,353k tonnes of high grade Eridanus ore stockpiled which will
provide the base load mill feed in the 2020 financial year as the Eridanus Stage 2 cut-back is mined.
Vegas
Open Pit
Mining of the small Vegas pit, which was mined to provide oxide BIF ore for blending purposes, was
completed during the year.
During the year 211k tonnes were mined at a grade of 1.12 g/t with 93k tonnes being milled at a
grade of 0.97 g/t and a recovery of 95.3% for recovered gold of 2,773 ounces.
Just under 200k tonnes remain stockpiled at year end for selective processing in the 2021
financial year.
Shannon
Underground
The Shannon underground mine performed very well during the year with production grades
exceeding expectations with significant visible, nuggety gold occurring within the quartz lode.
During the year, 158k tonnes were milled at a grade of 9.66 g/t and a recovery of 98.1% for
recovered gold of 48,237 ounces.
Development for the year at Shannon totalled 3,798 metres.
Water Tank Hill
Underground
Late in the 2019 financial year several additional small stoping areas were identified with the mining
of these areas continuing at modest volumes throughout the 2020 financial year.
Hill 60
Underground
Vivien
Underground
A total of 47k tonnes were milled at a grade of 2.96 g/t and recovery of 97.6% for recovered gold of
4,373 ounces.
Development work continued at the Hill 60 underground mine throughout the year with a total
of 3,032 metres of development taking place. Several ore drive levels were accessed with stoping
production commencing in the second half of the year.
During the year 104k tonnes were milled at a grade of 2.26 g/t and a recovery of 97.9% for
recovered gold of 7,362 ounces.
Stoping production will ramp up and continue throughout the 2021 financial year.
The Vivien mine was previously scheduled for completion in the 2020 financial year. However, the
success of drilling added both Mineral Resources and Ore Reserves to the mine plan (refer to ASX
Announcement dated 12 September 2019 “Vivien Underground Extended to June 2021”).
As part of this mine life extension, the mining contractor was changed to RUC Cementation Mining
and significant development work extending the mine life was undertaken.
Total high grade mill production from Vivien was 186k tonnes at a grade of 5.72 g/t and recovery of
97.5% for recovered gold of 33,313 ounces.
The current mine plan for Vivien has operations extending out to early in the 2022 financial year.
16
Ramelius Resources REVIEW OF OPERATIONS
MT MAGNET (CONTINUED)
MILLING
Table 2: Mt Magnet mill production for the 2020 financial year
Mill Production
Tonnes milled
Grade
Contained gold
Recovery
Recovered gold
Gold poured
Gold sold
Unit
2020
2019
Change %
kt
g/t
oz
%
oz
oz
oz
1,973
2.74
173,622
96.5
167,507
167,129
1,962
1.91
120,271
95.5
114,800
114,840
+ 1 %
+ 43 %
+ 44 %
+ 1 %
+ 46 %
+ 46 %
163,696
119,997
+ 36 %
A total of 1,973k tonnes were processed at the Mt Magnet mill during
the year compared to 1,962k tonnes in the prior year representing a
1% increase in throughput. Milled grades were up 43% on the prior
year which resulted in a significant increase in gold poured of 52,289
ounces or 46%.
Grades at Mt Magnet were up on the prior year as a result of 50%
more underground ore being available at a grade 21% higher than
the prior year. Underground grades were up on the prior year
predominately due to the performance of Shannon.
Additionally, whilst the tonnages milled from the open pit operations
were down (with the higher grade underground ore being preferentially
treated), the recovered gold was 17% higher than the prior year
with higher grades being achieved. The higher open pit grades were
attributable to the performance of the Eridanus ore which made up the
base load feed during the 2020 financial year.
Gold production from Mt Magnet is forecast to be approximately
155,000 ounces in the 2021 financial year.
Annual Report 2020
17
REVIEW OF OPERATIONS
EDNA MAY
MINING
Mining operations at Edna May focused on the Edna May underground mine, Greenfinch open pit, and the recently developed Marda Gold Project
(open pit). A summary of these projects for the year is provided as follows:
Area
Type
Operational commentary
Edna May Underground
Underground
Development of the Edna May underground commenced late in the 2019 financial year and continued
for the first half of the 2020 financial year.
During this development phase and into the second half of the 2020 financial year the proportion of
stope ore production steadily increased.
A total of 168k tonnes were milled at a grade of 4.11 g/t and recovery of 90.8% for recovered gold of
20,204 ounces.
Greenfinch
Open Pit
As reported earlier in this report, final Federal environmental approval for the Greenfinch open pit
project was received late January 2020 with clearing and mining commencing shortly thereafter.
Pre strip activities dominated the mining activities with just under 1.0 million bcms being moved at a
waste to ore strip ratio of 21.6:1.
A total of 107k tonnes were milled at a grade of 0.96 g/t and recovery of 92.8% for recovered gold of
3,055 ounces.
Marda
Open Pits
The Mining Proposal and Mine Closure Plan for the Marda Gold Project were approved in September
2019 with site works and ore mining commencing shortly thereafter.
A total of 449k tonnes were mined in the financial year at a grade of 1.78 g/t from the Python, Dugite,
Dolly Pott, and Goldstream open pits.
During the year 151k tonnes were milled at a grade of 2.22 g/t and a recovery of 91.8% for recovered
gold of 9,915 ounces.
As at 30 June 2020 a total of 276k tonnes of ore remained stockpiled at the mine site awaiting haulage
and processing.
MILLING
Table 3: Edna May mill production for the 2020 financial year
Mill Production
Tonnes milled
Grade
Contained gold
Recovery
Recovered gold
Gold poured
Gold sold
Unit
2020
2019
Change %
kt
g/t
oz
%
oz
oz
oz
2,262
0.99
71,697
91.2
65,360
63,297
2,842
0.94
85,650
93.9
80,464
81,839
– 20 %
+ 5 %
– 16 %
– 3 %
– 19 %
– 23 %
64,514
83,321
– 23 %
A total of 2,262k tonnes were processed at the Edna May mill during
the year compared to 2,842k tonnes in the prior year representing
a 20% decrease in throughput. Due to the delays in the Greenfinch
open pit approvals, Edna May milling was reduced to a 12 day on 9 day
off roster in October 2019. Milling reverted back to a 24/7 operation
in March 2020 once the Greenfinch approvals were received. The
milling schedule was scaled back in order to preserve low grade oxide
stockpiles for future blending with the underground and Marda ore.
Milled grades were up 5% on the prior year. The increased availability of
the higher grade underground tonnes was offset in part by the use of
low grade stockpiles at Edna May during the year. The above resulted in
a reduction in gold poured of 18,542 ounces or 23%.
Gold production from Edna May is forecast to be approximately
115,000 ounces in the 2021 financial year.
18
Ramelius Resources REVIEW OF OPERATIONS
DEVELOPMENT & EXPLORATION PROJECTS
DEVELOPMENT PROJECTS
In the 2019 Annual Report Ramelius outlined the plans for the following development projects:
• Greenfinch (Edna May)
• Marda Gold Project
• Tampia Gold Project
Of these three development projects, mining has commenced on two projects (Greenfinch and Marda) and a
Feasibility Study has been published for the Tampia Hill Gold Project (refer to ASX Announcement dated 30 April 2020
“Ramelius Life of Mine Update”) with mining expected to commence towards the end of the 2021 financial year.
In addition to this, a Pre-Feasibility Study (PFS) was published for the recently acquired Penny Gold Project
(Spectrum Metals Limited) (refer to ASX Announcement dated 30 June 2020 “Ramelius Extends Life of Mine Plan
by 34% to 1.45Moz”).
TAMPIA GOLD PROJECT (NAREMBEEN, WA)
During the year various technical studies, including metallurgy, surface
and groundwater hydrology, and ore haulage were progressed with an
updated Ore Reserve and Feasibility Study being published in April 2020
(refer to ASX Announcement dated 30 April 2020 “Ramelius Life of
Mine Update”). The Feasibility Study delivered a simplified processing
solution for the project which resulted in a significant reduction in
capital cost (~$24 million) and a commensurate reduction in operating
costs associated with processing.
Negotiations are continuing for the finalisation of the compensation
payments with landowners and with the 10% minority owner to resolve
incomplete arrangements made with the previous
tenement holders. In addition to this, stakeholder consultation
with relevant Shires and regulatory bodies is ongoing with production
expected to commence in the 2022 financial year.
The Tampia Gold Project has a Mineral Resource of 8.2Mt at 1.7 g/t for
460,000oz of contained gold and Ore Reserves of 2.5Mt at 2.7 g/t for
210,000oz of contained gold.
PENNY GOLD PROJECT (MURCHISON REGION, WA)
(SPECTRUM METALS LIMITED)
With control of Spectrum Metals Limited being achieved in March 2020
Ramelius moved quickly to complete and publish the results of the PFS
(refer to ASX Announcement dated 30 June 2020 “Ramelius Extends
Life of Mine Plan by 34% to 1.45Moz”).
The PFS proposes a partial cutback of the existing Penny West
pit to provide a suitable location for the development of the
Penny North underground main decline portal and ventilation / egress
adits. A small open pit is also planned to be mined on the Magenta lode
1.5 kilometres to the north of the Penny North underground mine
subject to the finalisation of the Feasibility Study and final investment
decision. Underground development at the Penny Gold Project is
scheduled to commence during the 2021 financial year with ore being
mined in the 2022 financial year. The mining method consists of a
conventional mechanised decline and 20m sub level development. The
stoping method is conventional longhole drilling and blasting of up-hole
bench stopes with a combination of in-situ pillars and cement rock fill
stope support. Ore will be hauled along existing access and government
roads to the Mt Magnet plant for processing.
Preparatory work is ongoing with environmental and heritage
surveys underway, stakeholder consultation, and miscellaneous
lease applications being made which will be incorporated into the
Feasibility Study.
ERIDANUS (MT MAGNET)
Significant drilling and studies were undertaken during the year on
Eridanus which resulted in substantial increases to the Mineral Resource
and Ore Reserve for Eridanus. Eridanus is now the third largest
endowment area in the +6 million ounce Mt Magnet gold camp, after
Hill 50 (2.1 million ounces), and Morning Star (1.2 million ounces).
The increased Ore Reserve resulted in a much larger open pit design
with Mining Approvals for the Stage 2 cutback being received late in the
financial year with operations commencing in July 2020.
Remodelling of the Eridanus underground resource, accounting
for additional deeper diamond drilling and quartz vein-sets mapped
in the open pit, commenced late in the year and is expected to
be completed along with the Scoping Study early in the 2021
financial year.
19
Annual Report 2020 REVIEW OF OPERATIONS
DEVELOPMENT & EXPLORATION PROJECTS (CONTINUED)
DEVELOPMENT PROJECTS (CONTINUED)
SHANNON & HILL 60 (MT MAGNET, WA) AND EDNA
MAY (WESTONIA, WA)
Underground infill and resource definition diamond drilling was
undertaken at the Mt Magnet and Edna May underground mines during
the year. Drilling is expected to improve resource confidence for
each deposit for ongoing mine development and potentially add extra
resources for mine extensions.
MINING/PROCESSING STUDIES AND
RESOURCE CONVERSION
The company plans to leverage its large resource base^, particularly at
Mt Magnet and Edna May, over the next twelve months to ultimately
produce a longer Life of Mine Plan (LOMP) with higher conversion of
resources. Ramelius notes that any increase in production that is largely
due to the higher gold price environment we are currently operating in
will generally lead to higher underlying operating costs due to a lower
cut-off grade being applied to design parameters. Notwithstanding,
mining/processing studies that are currently planned for 2021 financial
year include:
MT MAGNET
• Galaxy (Saturn, Mars, Titan and Hill 50) – underground studies to
look at options to convert a percentage of approximately 470koz^
of mineral resources into the LOMP
• Morning Star – underground study to consider the 79koz^ mineral
resource currently at depth as well as other nearby opportunities
• Eridanus/Shannon/Stellar – continue work on the bulk
underground option at Eridanus as well as accelerate extensional
drilling at Shannon and considering underground opportunities
below the high-grade pod at the base of the Stellar pit
• Processing facility – the processing plant, currently operating
between 1.9-2.0Mtpa, has previously operated up to 2.4Mtpa
with additional secondary crushing, ball mill and leach tanks being
decommissioned in the early 2000’s. The team is currently carrying
out a cost/benefit analysis on this upgrade option which, based on
previous studies, could be carried out for less than A$20.0 million.
EDNA MAY
• Edna May underground – carry out study on bulk underground
option and compare to current high-grade lode only mine plan
which focuses primarily on the Fuji and Jonathan lodes
• Edna May Stage 3 – re-visit the large cutback on the original Stage
2 pit to potentially unlock over 500koz^ of lower grade resources
which would potentially secure a mine life at Edna May out
towards 10 years.
^ refer to ASX Announcement dated 10 September 2019 “Resources and Reserves Statement 2019”.
20
Ramelius Resources REVIEW OF OPERATIONS
DEVELOPMENT & EXPLORATION PROJECTS (CONTINUED)
EXPLORATION PROJECTS
Ramelius’ exploration activities focussed around the Mt Magnet and Edna May Gold Projects during the year.
MT MAGNET
An aggregate of 37,920m of exploratory RC drilling and 3,413m of diamond drilling (including geotechnical drilling) was completed at Mt Magnet
during the year primarily focussing on extensions to the Eridanus open pit. Also included in this total was exploratory RC drilling at the Boomer,
Zeus, and Orion and Valhalla (Eridanus – Franks Tower Trend) prospects.
The major exploration activity at Mt Magnet is discussed below.
ERIDANUS DEEPS PROSPECT
HESPERUS SOUTH PROSPECT
Drilling at the Eridanus deposit continued to deliver significant results
with wide intersections of stockwork style mineralisation occurring
within the Eridanus Granodiorite below the current open pit. Drilling
took place in multiple orientations in order to work around active
mining operations and to test the stockwork mineralisation from
various directions. Ramelius has subsequently initiated an underground
bulk mining Scoping Study with the aim of realising value from the
deposit below the planned open pit.
A small program of RC drilling was completed at Hesperus South.
The program was designed to target the depth extensions to the
mineralised porphyries that extend throughout the Sirdar Formation
(Galaxy banded iron, mafic and ultramafic dominated package).
Encouraging mineralised porphyry results were returned with true
widths remaining undetermined at this stage. Further interrogation is
required to ascertain the significance of this drilling as a potential vector
to deeper mineralised systems.
MABEL AND GOLDEN TREASURE PROSPECTS
Infill (resource definition) RC drilling was completed over the Mabel
and Golden Treasure prospects during the year. Drilling was designed
to scope below the historical Golden Treasure pit as well as test the
mineralised banded iron formation ‘bars’ northwards towards Mabel.
Interrogation of the drilling results is continuing.
ORION (FRANKS TOWER TREND) AND
VALHALLA PROSPECTS
Encouraging reconnaissance RC drill results were returned from the
newly defined Orion Prospect. Orion occupies the 600m eastern
strike extension of the Eridanus Granodiorite before it leads into
the historical Franks Tower pit, further east. Analogous to Eridanus,
Orion is returning broad zones of anomalous stockwork related gold
mineralization and shallow supergene gold mineralization throughout
the granodiorite where it has been drill tested to date.
Further infill drilling along this highly prospective trend (now traceable
over 2km strike between Eridanus and the old Valhalla pit) is underway.
PENNY GOLD PROJECT (MURCHISON REGION, WA)
(SPECTRUM METALS LIMITED)
Ramelius fast tracked the completion of 4,222m of resource definition
RC drilling and 1,517m of diamond drilling at the Penny West, Penny
North and Magenta prospects during the year. The high-grade Penny
North mineralisation was enhanced with a geotechnical diamond hole
into the top of the resource.
In addition to this, encouraging intersections confirm further high-grade
gold mineralisation within the Penny West Lode immediately below
the pit.
At Magenta, located 1.8km north and along strike of the Penny West
pit, a resource-definition programme of shallow infill RC drilling was
completed. The drilling aimed to improve confidence in reported
shallow oxide intersections ahead of resource modelling and pit
optimisation work. The results of the resource modelling will be
integrated into the Penny Feasibility Study. The drill results are in line
with expectations.
21
Annual Report 2020 REVIEW OF OPERATIONS
DEVELOPMENT & EXPLORATION PROJECTS (CONTINUED)
EXPLORATION PROJECTS (CONTINUED)
EDNA MAY
An aggregate of 13,631m of RC drilling along with 66,362m of reconnaissance Aircore drilling took place in the year throughout the
Edna May / Tampia / Marda region (see figure 4).
Low order anomalous Aircore results (4m composites >100ppb Au) have been identified from several prospects that will require infill Aircore
traverses and/or deeper RC drill testing as/when access is permissible.
GIBB ROCK FARM-IN AND JOINT VENTURE PROJECT –
RAMELIUS EARNING 75%
Aircore drilling designed to test broad gold in soil anomalies along the
interpreted granite-greenstone contact commenced late in the year
with Assay results awaited at 30 June 2020.
OTHER
TANAMI JOINT VENTURE (NT) – RAMELIUS 85%
The Tanami Joint Venture was terminated during the year.
JUPITER FARM-IN AND JOINT VENTURE (NEVADA, USA)
– RAMELIUS EARNING 75%
No significant results were returned from a small RC drilling
programme completed at Jupiter during the year. COVID-19 travel
restrictions have since hampered any follow-up, but future work
programmes have been designed for the 2021 financial year.
MT HAMPTON (INCLUDING SYMES’ FIND)
Step out RC drilling was completed during the year outside the maiden
Indicated and Inferred Symes’ Find Mineral Resource of 540,000 tonnes
at 1.90g/t for 34,000 ounces of contained gold targeting the southern
strike and plunge projection of the higher grade shoots at Symes’ Find.
Disappointing results were returned from the immediate southern
extension to the resource, but infill drilling confirmed the robustness
of the deposit and reconnaissance drilling to the north of Symes has
indicated potential for northern extensions and/or repeats of the Symes
mineralisation.
HOLLETON MINING CENTRE
RC drilling along the Columbus and Calzoni trends within the Holleton
Mining Centre commenced late in the year after land access and
compensation agreements with private landowners were finalised. Initial
results appear encouraging with reasonable thicknesses of mineralisation
being intersected. Follow-up drilling will be planned but timing is
contingent upon site access and the completion of seasonal flora and
fauna surveys ahead of any ground disturbing activities as required.
TAMPIA EXPLORATION PROSPECTS
Encouraging RC drilling assay results have been returned from two
prospect areas located within 6km of the Tampia Resource. The RC
drilling was following up on anomalous Aircore results at Tampia South
and previous explorer’s drilling results at Dorset (part of Anomaly 8,
located 6km north of Tampia).
Further drill testing is required to ascertain the significance of the
Dorset intersections, whilst further infill drilling over the untested plus
1km southern strike extension to the intersections will be completed
after Christmas 2020, once the winter crops have been harvested at
Tampia South.
22
Ramelius Resources REVIEW OF OPERATIONS
DEVELOPMENT & EXPLORATION PROJECTS (CONTINUED)
Figure 4: Exploration and development projects around the Edna May Gold Mine
Annual Report 2020
23
RESOURCES AND RESERVES
COMPANY SUMMARY AS AT 30 JUNE 2020
ORE RESERVES UP 32%
The Ramelius Mineral Resources and Ore Reserves as at
30 June 2020 increased 15% and 32% respectively for the
year, after mining depletion.
Total Mineral Resources are estimated to be;
•
90 Mt at 1.6 g/t Au for 4.7 Moz of gold
Total Ore Reserves are estimated to be;
• 17 Mt at 2.1 g/t Au for 1.1 Moz of gold
Increases were achieved at Ramelius’ gold projects in Western
Australia via drilling and resource additions at Eridanus, Shannon and
Vivien, plus the acquisition of the Penny project. As in previous years,
the Company’s ability to consistently meet production guidance has
been underpinned by realistic resource modelling and deliverable
reserve estimates. Growth in both Mineral Resources and Ore
Reserves has accelerated in recent years as illustrated below.
Figure 5: Historical Resources and Reserves
24
Ramelius Resources
RESOURCES AND RESERVES
(CONTINUED)
MINERAL RESOURCES
TABLE 4: MINERAL RESOURCES
MINERAL RESOURCES AS AT 30 JUNE 2020 – INCLUSIVE OF RESERVES
Project
Deposit
Measured
Indicated
Inferred
Total Resource
t
g/t
oz
t
g/t
oz
t
g/t
oz
t
g/t
oz
Galaxy Group
Morning Star
Bartus Group
Boomer
Britannia Well
Bullocks
92,000
-
49,000
-
-
-
1.8
-
2.2
-
-
-
Eastern Jaspilite
150,000
2.2
10,000
5,400
3,600,000
-
4,900,000
4,000
110,000
-
-
-
1,200,000
180,000
200,000
120,000
170,000
Eclipse
Eridanus
Golden Stream
Golden Treasure
Lone Pine
Mt Magnet
Milky Way
Spearmont-Galtee
Stellar
Welcome - Baxter
Open Pit deposits
Hill 50 Deeps
Hill 60
Morning Star Deeps
Saturn UG
Shannon
-
-
-
280,000
1.4
12,000
7,500,000
-
-
-
-
-
-
220,000
790,000
280,000
260,000
-
-
-
-
-
-
-
-
1.6
1.7
5.5
4.2
-
-
-
-
-
-
-
-
11,000
150,000
780,000
490,000
820,000
25,000
260,000
280,000
43,000
21,000,000
49,000
35,000
-
-
930,000
220,000
190,000
-
1.7
1.9
2.1
1.8
2.0
3.3
2.8
2.2
1.2
2.9
1.1
1.3
1.1
2.9
2.4
1.6
1.6
7.0
4.7
4.2
-
190,000
2,200,000
300,000
4,300,000
8,000
68,000
12,000
21,000
11,000
12,000
240,000
790,000
-
40,000
130,000
41,000
290,000
5,400,000
14,000
28,000
21,000
67,000
880,000
390,000
29,000
1,600,000
2,000
210,000
20,000
15,000
-
200,000
1,000,000
16,000,000
210,000
400,000
34,000
26,000
36,000
330,000
-
1,600,000
63,000
14.2
29,000
83,000
14.0
38,000
270,000
110,000
1,400,000
6.6
310,000
2,600,000
UG deposits
610,000
ROM & LG stocks
4,000,000
Total Mt Magnet
5,400,000
Edna May
Edna May UG
Edna May
Greenfinch
ROM & LG stocks
-
-
940,000
190,000
Total Edna May
1,100,000
Vivien UG
Coogee
Symes Find
Dolly Pot
Dugite
Python
Goldstream
Golden Orb
King Brown
Die Hardy
Red Legs
310,000
-
-
-
-
-
-
-
-
-
-
Vivien
Coogee
Symes
Marda
Tampia
Penny
5.8
0.7
1.4
-
-
1.0
0.5
0.9
4.8
-
-
-
-
-
-
-
-
-
-
95,000
-
250,000
22,000,000
-
-
18,000,000
310,000
30,000
1,900,000
2,700
-
33,000
20,000,000
48,000
230,000
-
-
-
-
-
-
-
-
-
-
14,000
28,000
570,000
530,000
170,000
620,000
71,000
380,000
140,000
940,000
-
-
14,000
2,900,000
31,000
7,700,000
-
1.9
1.0
5.1
1.0
-
1.0
5.2
3.6
1.9
1.7
1.7
1.8
2.5
2.9
4.2
1.6
-
-
2.0
1.7
-
-
1,400,000
19,000,000
560,000
5,000,000
51,000
280,000
59,000
1,400,000
-
-
670,000
6,700,000
38,000
200,000
3,200
35,000
29,000
9,600
35,000
5,800
35,000
18,000
49,000
-
-
-
-
59,000
39,000
47,000
180,000
140,000
200,000
49,000
360,000
370,000
-
130,000
200,000
ROM & LG stocks
Total Marda
Tampia
260,000
260,000
390,000
Nth, West & Magenta
-
1.7
1.7
2.4
-
180,000
1,300,000
420,000
-
420,000
19.0
260,000
1.3
1.5
1.6
1.0
-
2.5
2.5
2.1
1.1
1.2
1.0
1.7
1.1
4.3
-
1.8
1.3
6.4
3.4
5.0
2.5
4.6
3.6
-
1.6
1.0
4.3
0.8
-
1.1
2.9
3.3
1.2
1.6
1.8
1.4
1.7
1.8
1.5
2.9
-
2.0
1.8
6.6
93,000
5,900,000
210,000
9,200,000
12,000
400,000
26,000
2,000,000
-
3,000
11,000
3,000
180,000
240,000
400,000
210,000
200,000
13,000,000
2,700
220,000
28,000
1,700,000
21,000
870,000
57,000
2,400,000
28,000
-
11,000
230,000
260,000
700,000
700,000
38,000,000
81,000
1,600,000
3,900
53,000
520,000
530,000
130,000
1,600,000
40,000
410,000
300,000
4,700,000
-
4,000,000
1,000,000
47,000,000
150,000
23,000,000
39,000
590,000
39,000
4,300,000
-
190,000
230,000
28,000,000
19,000
740,000
6,300
1,500
2,400
-
10,000
6,000
11,000
2,800
87,000
610,000
580,000
170,000
790,000
210,000
580,000
190,000
17,000
1,300,000
34,000
-
370,000
260,000
84,000
4,400,000
7,400
8,200,000
1.5
1.7
1.9
1.5
2.1
3.1
2.5
2.2
1.2
2.4
1.0
1.5
1.1
4.0
2.4
1.7
1.5
6.6
4.3
4.7
2.5
8.0
4.8
0.7
1.7
1.0
4.7
0.9
0.5
1.0
4.4
3.4
1.9
1.7
1.7
1.8
1.8
2.5
3.5
1.6
2.9
1.7
2.0
1.7
290,000
510,000
24,000
94,000
12,000
24,000
32,000
15,000
500,000
17,000
56,000
42,000
86,000
30,000
20,000
37,000
1,800,000
340,000
73,000
79,000
130,000
110,000
720,000
95,000
2,600,000
710,000
90,000
130,000
2,700
930,000
100,000
9,600
37,000
31,000
9,600
45,000
12,000
47,000
21,000
66,000
34,000
14,000
280,000
460,000
42,000
620,000
15.0
300,000
Total Resource
7,500,000
1.6
380,000
54,000,000
1.7
3,000,000
28,000,000
1.6
1,400,000
90,000,000
1.6
4,700,000
Figures rounded to 2 significant figures. Rounding errors may occur.
25
Annual Report 2020 RESOURCES AND RESERVES
(CONTINUED)
historic in nature or gathered by previous owners, however Ramelius
has added significant further drilling for all deposits, especially those
forming Ore Reserves. Mineralisation has been modelled via cross-
sectional interpretations using deposit appropriate lower cut-off grade
shapes and geological interpretations. Geological understanding has
formed the basis of all ore interpretations. Ore domain interpretations
have then been wireframed using geological software, including
Micromine, Leapfrog and Surpac. Mineralisation has been grouped
by domain where required and statistical analysis, top-cutting and
estimation carried out using anisotropic search ellipses. Estimation
uses Ordinary Kriging and/or Inverse Distance methods. Modelling has
been undertaken with recognition of the probable mining method and
minimum mining widths and the resource classifications reflect drill
spacing, data quality, geological and grade continuity.
Density information for fresh rock is generally well established and
new measurements have frequently been obtained. Nearly all deposits
listed, with the exception of Tampia, have had some degree of recent
production or historic mining. Resources are reported using cut-offs
approximating A$1,600 - A$2,300/oz gold price.
MINERAL RESOURCES
(CONTINUED)
MINERAL RESOURCE COMMENTARY
Mt Magnet is comprised of numerous gold deposits contained within
a contiguous tenement holding, located within an 8km radius of the
processing facility. Current and recent mining operations include the
Eridanus, Milky Way, Stellar and Vegas open pits and the Hill 60 and
Shannon underground mines. Vivien is a high-grade quartz lode deposit,
located near Leinster.
The Edna May mine was acquired in October 2017. It was re-modelled
and reported in 2019, following significant underground and surface
drilling campaigns. It comprises of the large-scale Edna May granitoid
hosted, stockwork deposit and the related, adjacent Greenfinch deposit.
Two high grade cross-cutting quartz lodes are mined underground
within the broader Edna May deposit. In 2020, mining commenced at
the Greenfinch open pit providing a significant base load ore source.
In late 2019 mining operations commenced at the Marda project,
130km north of Southern Cross. Ore haulage and milling of this ore at
Edna May commenced in early 2020.
All deposits have been depleted from mining during the 2020
financial year.
Continued exploration, resource definition and grade control drilling
has delivered significant increases to resources and reserves for the
Eridanus, Shannon and Vivien deposits. Acquisition of the Penny project
also added a major component of the resource and reserve increase.
See RMS ASX releases below for additional Mineral Resource reporting
details:
•
•
•
‘Vivien Underground Extended to June 2021’, 12 September 2019
‘Major Increase of Eridanus Mineral Resource’, 23 December 2019
‘Ramelius Extends Life of Mine Plan by 34% to 1.45Moz’, 30 June 2020
Minor decreases occurred with disposal of the Kathleen Valley and
Western Queen projects.
The Tampia deposit is hosted within amphibolite facies mafic rocks
12km SE of Narembeen in the WA wheatbelt. Gold is hosted within
shallow dipping lode/shear zones and associated with arsenopyrite.
Symes Find is located 120km SSE of Edna May, also in the WA
wheatbelt and consists of lateritic and primary mineralisation hosted in
mafic gneiss units similar to Tampia.
The Penny project was acquired via the takeover of Spectrum Metals in
early 2020. Penny West is a high grade quartz-sulphide lode discovered
and mined by open pit in the early 1990’s. Spectrum discovered the
high grade Penny North lode in early 2019 and rapidly drill defined a
significant lode resource.
All resources are based on combinations of RC and diamond drill holes.
Sampling has been via riffle or cone splitters (RC) or by sawn half core.
Assay is carried out by commercial laboratories and accompanied by
appropriate QAQC samples. A substantial proportion of drill data is
26
Ramelius Resources RESOURCES AND RESERVES
(CONTINUED)
ORE RESERVES
TABLE 5: ORE RESERVES
Project
Deposit
Mt Magnet
Edna May
Vivien
Marda
Boomer
Brown Hill
Eridanus
Golden Stream
Morning Star
Stellar
Total Open Pit
Hill 60
Shannon
Total Underground
ROM & LG stocks
Mt Magnet Total
Edna May UG
Greenfinch
ROM & LG stocks
Edna May Total
Vivien UG
Dolly Pot
Dugite
Python
Goldstream
Golden Orb East
Golden Orb West
King Brown
ROM & LG stocks
Total Marda
Tampia
Penny
Total Reserve
Tampia
Penny North & Magenta
ORE RESERVE STATEMENT AS AT 30 JUNE 2020
Proven
g/t
t
-
-
oz
t
-
-
-
-
130,000
620,000
91,000
1.1
3,200
3,600,000
-
-
-
91,000
100,000
90,000
190,000
4,000,000
4,300,000
79,000
610,000
190,000
880,000
110,000
-
-
-
-
-
-
-
260,000
260,000
190,000
-
5,700,000
-
-
-
1.1
2.5
9.7
5.9
0.7
1.0
5.0
1.1
0.5
1.3
6.1
-
-
-
-
-
-
-
1.7
1.7
3.4
-
1.2
-
-
-
3,200
8,200
28,000
36,000
95,000
95,000
1,100,000
64,000
5,700,000
350,000
120,000
470,000
-
130,000
6,100,000
13,000
22,000
2,800
190,000
920,000
-
37,000
1,100,000
22,000
-
-
-
-
-
-
-
14,000
14,000
200,000
330,000
110,000
310,000
53,000
64,000
140,000
75,000
-
14,000
1,100,000
20,000
-
230,000
2,300,000
500,000
11,000,000
Probable
g/t
2.9
1.6
1.2
3.0
1.9
6.3
1.5
2.5
7.2
3.7
-
1.7
4.6
1.0
-
1.7
4.5
1.6
1.8
1.8
2.7
4.2
2.7
5.3
-
2.3
2.6
14.0
2.5
Figures rounded to 2 significant figures. Rounding errors may occur.
ORE RESERVE COMMENTARY
Total Reserve
t
g/t
oz
oz
12,000
31,000
130,000
620,000
140,000
3,700,000
9,200
95,000
68,000
1,100,000
13,000
64,000
270,000
5,700,000
28,000
27,000
55,000
450,000
210,000
660,000
-
4,000,000
330,000
10,000,000
29,000
270,000
31,000
1,500,000
-
190,000
60,000
2,000,000
29,000
17,000
6,200
18,000
4,600
8,600
12,000
13,000
310,000
330,000
110,000
310,000
53,000
64,000
140,000
75,000
-
260,000
79,000
1,300,000
190,000
230,000
910,000
2,500,000
500,000
17,000,000
2.9
1.6
1.2
3.0
1.9
6.3
1.5
2.5
8.3
4.3
0.7
1.4
4.7
1.1
0.5
1.5
5.1
1.6
1.8
1.8
2.7
4.2
2.7
5.3
1.7
2.1
12,000
31,000
140,000
9,200
68,000
13,000
280,000
36,000
55,000
91,000
95,000
460,000
41,000
52,000
2,800
96,000
50,000
17,000
6,200
18,000
4,600
8,600
12,000
13,000
14,000
93,000
2.7
14.0
2.1
210,000
230,000
1,100,000
All Ore Reserves have been reported from Measured and Indicated Resources only. Current operations are the Stellar, Eridanus, Greenfinch,
Dugite, Dolly Pot, Python and Goldstream pits and the Vivien, Edna May, Shannon and Hill 60 underground mines. All current pit and underground
operations were depleted to 30 June 2020.
All Ore Reserves have been generated from design studies using appropriate cost, geotechnical, slope angle, stope span, dilution, cut-off grade and
recovery parameters. Ore Reserves are utilised in the current Life of Mine plan. Mining approvals processes are in progress for the Tampia open pits
and Penny underground operation.
Various gold prices have been used to generate Ore Reserves and appropriate cut-offs;
• Mt Magnet open pit reserves including Boomer, Brown Hill, Golden Stream, Morning Star and Stellar utilise a gold price of A$1,650/oz, except
for Eridanus which utilises A$2,000/oz
• Mt Magnet underground mine reserves including Hill 60 and Shannon utilise A$2,100/oz.
• Edna May open pits reserves (Greenfinch) utilise a gold price of A$1,650/oz and the underground utilises a gold price of A$1,800/oz
• Vivien underground reserves utilise a gold price of A$2,000/oz
• Marda open pits reserves utilise a gold price of A$1,700/oz
• Tampia open pit reserves utilise a gold price of A$2,100/oz
• Penny open pits and underground utilise a gold price of A$2,300/oz
27
Annual Report 2020 RESOURCES AND RESERVES
(CONTINUED)
ORE RESERVES (CONTINUED)
ORE RESERVE COMMENTARY (CONTINUED)
Mining, milling and additional overhead costs are based on currently contracted and budgeted operating costs. Mill recoveries for all ore types are
based upon operating experience or metallurgical testwork. Stockpiles consist of ROM stocks and low-grade stocks mined after 2012.
Figure 6: Reserve Inventory Change
FORWARD LOOKING STATEMENTS
This report contains forward looking statements. The forward looking statements are based on current expectations, estimates, assumptions,
forecasts and projections and the industry in which it operates as well as other factors that management believes to be relevant and reasonable in
the circumstances at the date such statements are made, but which may prove to be incorrect. The forward looking statements relate to future
matters and are subject to various inherent risks and uncertainties. Many known and unknown factors could cause actual events or results to differ
materially from the estimated or anticipated events or results expressed or implied by any forward looking statements. Such factors include, among
others, changes in market conditions, future prices of gold and exchange rate movements, the actual results of production, development and/or
exploration activities, variations in grade or recovery rates, plant and/or equipment failure and the possibility of cost overruns. Neither Ramelius, its
related bodies corporate nor any of their directors, officers, employees, agents or contractors makes any representation or warranty (either express
or implied) as to the accuracy, correctness, completeness, adequacy, reliability or likelihood of fulfilment of any forward looking statement, or any
events or results expressed or implied in any forward looking statement, except to the extent required by law.
COMPETENT PERSONS
The information in this report that relates to Mineral Resources and Ore Reserves is based on information compiled by Rob Hutchison (Mineral
Resources) and Duncan Coutts (Ore Reserves), who are Competent Persons and Members of The Australasian Institute of Mining and Metallurgy.
Rob Hutchison and Duncan Coutts are full-time employees of the company. Rob Hutchison and Duncan Coutts have sufficient experience that
is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent
Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”.
Rob Hutchison and Duncan Coutts consent to the inclusion in this report of the matters based on their information in the form and context
in which it appears.
28
Ramelius Resources Annual Report 2020
29
SUSTAINABILITY
REPORT
2020 Achievements
About Ramelius
Our Business
Our People
Our Communities
Our Environment
Performance Data
32
35
41
44
48
51
55
30 Ramelius Resources
ENVIRONMENTAL SOCIAL
GOVERNANCE PERFORMANCE
Annual Report 2020
31
SUSTAINABILITY REPORT
2020 ACHIEVEMENTS
2020 HIGHLIGHTS
OUR BUSINESS
(Economic performance)
(Organisational governance)
(Regulatory and compliance)
RECORD
CASH FLOW, DIVIDENDS
AND WAGE PAYMENTS
NEW RISK
AND SUSTAINABILITY
COMMITTEE FORMED
ZERO FINES
OR MATERIAL INCIDENTS
OUR PEOPLE
(Health, safety
and wellbeing)
NEW SAFETY
MANAGEMENT SYSTEM, INCREASING
TRANSPARENCY
(Employment and
contractors)
33% OF NEW
HIRES WERE FEMALE
(Talent attraction,
development and
retention)
39 TEAM MEMBERS
COMPLETED MINE
EMERGENCY RESPONSE
AND RESCUE CERTIFICATE
32 Ramelius Resources
SUSTAINABILITY REPORT (CONTINUED)
OUR COMMUNITIES
(Indigenous and native title)
TWO INDIGENOUS
DEVELOPMENT PROJECTS
OUR ENVIRONMENT
(Water)
19% OF TOTAL
WATER IS REUSED
(Taxes, royalties and
supplier payments)
A$476m
CONTRIBUTED TO
AUSTRALIAN ECONOMY
(Community relations and
investment)
OVER $400k
DIRECTLY DONATED TO LOCAL
COMMUNITIES
(Emissions and energy)
BASELINE
SET FOR ONGOING
EMISSIONS AND ENERGY
MEASUREMENT AND COMPARISON
(Waste, effluents, air pollution)
UPGRADED
WASTEWATER
TREATMENT
AT EDNA MAY MAKING WASTEWATER
SAFE FOR PUBLIC IRRIGATION
Annual Report 2020
33
SUSTAINABILITY REPORT (CONTINUED)
This year we contributed $476 million to the Australian economy
and spent approximately $8.2 million directly with local businesses,
employees and community organisations. In addition to our
sponsorships and donations, we partner with our community
stakeholders on legacy projects that will provide benefits to the
community that last beyond the life of the mine.
We seek opportunities to effectively manage water and energy,
minimise waste, and to reduce our environmental footprint. The
2020 financial year will serve to set a baseline for measuring our
environmental impact and we will be looking to make reductions
through the 2021 financial year and beyond.
Across the entire Ramelius business our people have continued to
work incredibly hard during the year and I would like to thank each
and every Ramelius employee, Director and contractor for their
contribution and effort. The progress we have made would not have
been possible without you.
THE CEO ON
SUSTAINABILITY AT RAMELIUS
DEAR RAMELIUS STAKEHOLDERS,
This year we have taken significant steps towards our mission of
becoming a sustainable gold producer that focuses on delivering
superior returns for stakeholders. We believe a sustainable gold
producer should deliver more than just financial benefit. It’s about
the way we do business, the relationships we build with our
people and communities, and the efforts we make to conserve the
environment.
Our inaugural Sustainability Report aims to provide transparency on
the path we take in delivering superior returns for our stakeholders.
We believe that our direct and indirect contribution should
generate value for our people, communities and society at large.
We have started our journey of actively participating in disclosure
of sustainability issues and opportunities. In the 2020 financial
year , we engaged an independent sustainability consultant to
facilitate a workshop with Ramelius sustainability leaders to identify
and prioritise our stakeholders and topics that are of material
importance to the Company.
We know that we can’t make a contribution to sustainable
development without excellent financial performance and as
detailed in this Annual Report, the 2020 financial year saw a number
of positive milestones. We believe in strong and transparent
corporate governance and are committed to maintaining a high
standard in all aspects of corporate governance. To further develop
our capacity in these areas, we formed a new Risk and Sustainability
Committee to assist the Board in its responsibilities of overseeing
risk, governance, and sustainability activities which include setting
objectives for environmental and community obligations, ethical
standards and compliance.
Our success and the delivery of our long-term strategy is reliant
on our people embodying our values of Honesty, Fairness and
Respect. Operating within the resources industry, we know it is
essential to provide a healthy and safe workplace for our people.
We know we’ll always have work to do in this area but are striving
to improve our safety performance every year. The adoption this
year of a new reporting system will ensure greater accountability
and hopefully keep our people safer. We work to attract, develop
and retain talented people not only with the best skills but with the
best mindset and were very happy to retain a high proportion of
our people.
34
Ramelius Resources SUSTAINABILITY REPORT (CONTINUED)
ABOUT RAMELIUS
MISSION STATEMENT
“To be a sustainable gold producer that focuses on
delivering superior returns for stakeholders”
OUR VALUES
At Ramelius Resources (Ramelius), we are defined by the following
core values:
• Honesty
• Fairness
• Respect
Our culture is defined by a ‘fit-for purpose and can-do’ attitude.
OUR CORPORATE STRATEGY
• Actively seek to grow annual production beyond 300koz gold
• Maintain mine life at five years or more through exploration
and acquisition
SUSTAINABILITY PILLARS
SUSTAINABILITY
STATEMENT
We believe a sustainable gold
producer should deliver more than just
financial benefit. It’s about the way we
do business, the relationships we build
with our people and communities and
the efforts we make to conserve the
environment.
OUR BUSINESS
OUR PEOPLE
OUR COMMUNITIES
OUR ENVIRONMENT
Economic performance
Health, safety and wellbeing
Indigenous and native title
Water
Regulatory and compliance
Employment and contractors
Organisational governance
Talent attraction,
development and retention
Taxes, royalties and
supplier payments
Community relations and
investment
Emissions and energy
Waste, effluents, air pollution
35
Annual Report 2020 SUSTAINABILITY REPORT (CONTINUED)
ABOUT RAMELIUS (continued)
OUR SUSTAINABILITY ECOSYSTEM
Through the Risk & Sustainability Committee, our Board of Directors maintains oversight of all sustainability impacts and activities across
Ramelius. We strive to conduct business in a sustainable manner, guided by the following hierarchy:
Risk & Sustainability Committee Charter
Sustainability Policies
Sustainability
Statement & Pillars
Community
Consultation
Policy
Indigenous
People Policy
Risk
Management
Policy
HSE Policy
Diversity Policy
Code of
Conduct
This Sustainability Report, approved for release by our Board of Directors, covers the financial year ended 30 June 2020. The report forms
part of our annual corporate reporting suite and offers an account of our interaction with our stakeholders. The currency used throughout
this report is Australian Dollars (A$). Further information about Sustainability at Ramelius (including policies) can be found on our website.
GROUP INFORMATION
Ramelius Resources Limited is a Western Australian
gold producer headquartered in East Perth with
approximately 300 employees. We were incorporated
in 1979, listed on the Australian Securities Exchange
in 2003 (ASX: RMS) and have been in production
since 2006.
Ramelius and our subsidiaries are engaged in the
exploration, mine development, and production and sale
of gold in Australia.
We own and operate the Mt Magnet Gold Mine, the
Vivien Gold Mine, the Edna May Gold Mine and the
Marda Gold Project and associated processing plants
around Western Australia.
Ramelius has enjoyed significant success in recent years
with increased gold production and the addition of new
WA gold mining projects Tampia and Penny.
Figure 7: Ramelius’ operations locations
In addition to the operations listed above, Ramelius is involved in:
• Three WA-based exploration projects: Mt Magnet, Edna May and Holleton (including Symes’ Find, Tampia and Marda)
• One US-based farm-in/joint venture: Jupiter Gold Project in Nye County, Nevada (Ramelius: 75%, Renaissance: 25%)
Further information is available on our website1.
1 www.rameliusresources.com.au/projects
36
Ramelius Resources SUSTAINABILITY REPORT (CONTINUED)
ABOUT RAMELIUS (continued)
SUPPLY CHAIN
Contractors and suppliers are a critical part of our business and are relied upon to ensure that we deliver on our strategy. The supply chain
at Ramelius includes but is not limited to:
EXPLORATION
& PROJECT
DEVELOPMENT
Drilling contractors
Geology and geophysical
contractors
Analytical laboratories
Surveying
Earthmoving contractors
Environmental and water
consultants
MINING
Surface and underground mining
contractors
Cement supply
Fleet, maintenance, parts and
equipment
Fuel, oil and tyre supply
Mining communications
PROCESSING
Chemical supply
Lab services
Civil contractors
Fuel and gas supply
TRANSPORTATION
REFINING AND SALES
Freight services
Ore Haulage contractor
Refinery
Customers
Security services
Bullion freight and security
Aviation charter companies
SUPPORT SERVICES
Camp management services
Power, communication and IT
services
Insurance
Employee benefits
Personal protective equipment
and clothing
Medical, health and safety services
Labour supply
Water and waste management
37
Figure 7: Ramelius’ operations locations
Annual Report 2020 SUSTAINABILITY REPORT (CONTINUED)
ABOUT RAMELIUS (continued)
UNITED NATIONS (UN) SUSTAINABLE DEVELOPMENT GOALS
Ramelius is focused on aligning environmental, social and governance policies and activities across our operations in accordance with the UN
Sustainable Development Goals (SDGs). These are considered the blueprint to achieving a better and more sustainable future for all and as
such represent a major inspiration for the future prosperity of our stakeholders.
We have chosen the ten most relevant SDGs that align to our business, strategy and stakeholder priorities. The following table summarises
the ways in which we are striving to contribute to the ten specific SDGs:
GOAL 9:
Industry,
Innovation and
Infrastructure
GOAL 10:
Reduced
Inequalities
•
As a gold producer, we recognise the
important contribution that we make to
the industrial use of gold as a conductor
in electronics, including components for
clean energy products such as renewable
energy and battery storage. Gold is
also used in other innovative industrial
products and infrastructure in the energy,
medical, aerospace, dentistry and health
sectors.
• Through our membership of the
Gold Industry Group, we are involved
in cutting-edge research to improve
efficiencies in gold exploration and to
support innovation in the Australian
mining industry.
• We consider native titleholders and
indigenous communities as core
stakeholder groups across all of our
operations. We strive to work from a
position of respect for local indigenous
culture with the aim of creating goodwill,
mutual awareness, understanding and
respect.
• As outlined in our Indigenous Peoples
Policy, we work with Aboriginal
representatives to improve
communication and to better understand
the views and beliefs of local indigenous
communities. We aim to ensure that
employees and contractors approach
local sites with respect and a clear
understanding of importance of the land
to indigenous communities.
• Established high on-site safety standards
to minimise the risk of employee and
contractor harm from occupational
hazards, air pollution, transport accidents
and other risks.
• Provide employee medical checks and
a health assistance program across all
operations. Also developing employee
health and wellness programs to help
reduce illness and disease.
• In response to the COVID-19 pandemic,
we have put in place cleanliness and social
distancing measures in accordance with
advice from State and Federal health
authorities.
•
We value the contribution of all of our
employees and encourage personal
development and training to enable our
workforce to achieve their full potential.
• We are committed to recruiting the
best candidates regardless of gender,
age, religion or cultural background. Our
Diversity Policy ensures encourages a
workforce comprised of individuals with
a wide range of backgrounds, skills and
experiences.
• We endeavour to build and maintain a
sustainable, diverse, satisfied and high-
performing workforce. To do this, we
encourage staff training and ongoing
professional development, with all
employees offered the opportunity to
develop their skills and capabilities to
improve their professional abilities.
• We publicly report to shareholders and
investors to ensure they are informed
on corporate governance issues and
sustainability matters, including business-
related risks and maintenance of risk
registers across all sites.
GOAL 3:
Good Health
and Well-being
GOAL 5:
Gender Equality
GOAL 8:
Decent Work
and Economic
Growth
38
Ramelius Resources SUSTAINABILITY REPORT (CONTINUED)
ABOUT RAMELIUS (continued)
GOAL 15:
Life on Land
GOAL 16:
Peace, Justice
and Strong
Institutions
• We undertake and strive to improve our
waste product management activities
including mine site sewage, tailings and
other hazardous materials, dust and
general waste. Landfill rehabilitation and
ongoing restoration is also undertaken
wherever possible.
• We maintain a focus on the efficient
use of resources including water and
electricity and endeavour to implement
water and other resource recycling
measures wherever possible.
• We acknowledge our social
responsibilities and the need to meet
community expectations around ESG
reporting. We report in accordance
with the National Pollutant Inventory
(NPI), National Greenhouse and Energy
Reporting (NGER), Workplace Gender
Equality Agency (WGEA) and the Modern
Slavery Act 2018.
• To ensure governance expectations
around sustainability, we follow the
ASX Corporate Governance Council’s
Corporate Governance Principles and
Recommendations 3rd Edition.
GOAL 11:
Sustainable
Cities and
Communities
GOAL 12:
Responsible
Consumption
and Production
GOAL 13:
Climate Action
• We seek to build relationships with
all stakeholders to ensure that their
views and concerns are taken into
account in order to achieve mutually
beneficial outcomes. This includes
current operations, future planning and
post-closure activities such as mine
rehabilitation.
• Where possible, we support local
organisations and businesses as a first
option in procurement with the aim of
developing the capacity of businesses in
our local communities to improve local
job creation and economic prosperity.
• In accordance with legislation, we
seek to comply with requirements
around environmental protection
and sustainability and promote a high
regard for the environment across our
operations. Reporting mechanisms
include environmental impact studies,
incident reporting and pollution audits.
• Biodiversity planning is always included as
part of our planning process. This includes
flora and fauna studies, native vegetation
recording and disturbed land restoration
and rehabilitation.
• We acknowledge that physical and
transitional risks associated with climate
change have the potential to negatively
impact our business. Top priority climate-
related risks include reduced water
availability, extreme weather events,
changes to legislation and regulation,
reputational risk, and technological and
market changes.
• We are committed to understanding
and proactively managing the impact of
climate-related risks to our business. This
includes integrating climate-related risks,
as well as energy considerations, into our
strategic planning and decision-making
and working towards disclosure on the
impact of climate risk on our business and
the ways in which we mitigate such risks.
39
Annual Report 2020 SUSTAINABILITY REPORT (CONTINUED)
ABOUT RAMELIUS (continued)
STAKEHOLDER ENGAGEMENT
To determine the content of this report, Ramelius has reviewed the
topics that matter most to our business and stakeholders. We have
applied a materiality process to assess the importance and impact of
topics on our business and stakeholders, which informs the scope
and level of disclosures. Our stakeholder groups include:
• Shareholders, lenders, investment community and insurers
• Suppliers, contractors, partners and customers
• Employees, unions and the Board
• Regulators and government
• Local communities, shires and landowners
• Native title owners and indigenous groups
• Media and non-governmental organisations (NGO)s
• Education, research and training organisations
One of our key sustainability pillars is the engagement of
communities through regular consultation processes, which are
guided by our Community Consultation Policy. Proactive dialogue
allows us to keep the community informed about our activities
and to provide a forum through which community members can
provide feedback to our business. In the 2020 financial year
we have had regular meetings and correspondence with
government departments, local government shires, pastoralists
and native title groups.
MATERIAL TOPICS AND MATRIX
This report focuses on the economic, social and environmental
topics identified as being of material value to our stakeholders
and our business. Inspired by the Global Reporting Initiative (GRI)
standards for sustainability reporting, in the 2020 financial year
we prioritised our material topics by combining feedback from
our Executive, internal Sustainability Project Team, stakeholder
expectations and an analysis of peers and the external environment.
Topics have been reviewed and prioritised to ensure the corporate
mission and strategic imperatives are considered.
OUR MATERIAL ISSUES ARE PRESENTED IN THE FOLLOWING MATRIX:
Very
high
S
R
E
D
L
O
H
E
K
A
T
S
Low
Low
40
Health, safety and
wellbeing
Economic performance
Regulatory/compliance
Taxes, supplier payments
and royalties
Talent attraction,
development and retention
Water
Types of employment and
contractors
Community investment
and engagement
GHC/Emissions/Energy
Indigenous/native title
Waste and tailings
Diversity
Ethics and Human Rights
Biodiversity
Information technology
Innovation
Mire closure/
rehabilitation
RAMELIUS
Very high
Ramelius Resources SUSTAINABILITY REPORT (CONTINUED)
OUR BUSINESS
Economic performance
Regulatory and compliance
Organisational governance
Ramelius employee Jess Wallrodt on the Perth Heart of Gold Discovery Trail, sponsored through
Gold Industry Group
ECONOMIC PERFORMANCE
Maintaining high and stable levels of economic growth is one of
the key objectives of sustainable development (SDG 8). Economic
performance and therefore sustainability, aims to improve standards
of living through efficient use of assets to maintain long-term
company profitability. Economic performance creates economic
value and therefore requires Ramelius to make decisions in the most
fiscally responsible way possible. Ramelius’ projects and production
decisions are made to create long-term value, rather than just the
short-term benefits. To be a sustainable business and execute its
sustainability strategies, Ramelius must have financial stability. On a
larger scale, Ramelius contributes to a sustainable economy that is
strong and resilient, environmentally conscientious and creates value
for communities. Without strong economic performance, Ramelius
can’t provide jobs for local workforces, generate tax revenue to fund
public services or support supplier businesses. Ramelius’ strategy
aims to promote a sustainable economy that fosters economic
development, local prosperity through goods and services, and
creating partnerships within regions to generate jobs.
REGULATORY AND COMPLIANCE
Ramelius acknowledges the range of social responsibilities to which we
must adhere to ensure our business meets community and government
expectations. We are pleased to report that there were no material
compliance or regulatory breaches in the 2020 financial year.
Further details on the way in which we report against the following
frameworks is covered in more detail later in this report:
• The National Pollutant Inventory (NPI): provides the
community, industry and government with information
about substance emissions in Australia
• National Greenhouse and Energy Reporting (NGER): the
national framework for reporting and disseminating
company information about greenhouse gas emissions,
energy production and energy consumption
• Workplace Gender Equality Agency (WGEA): an Australian
Government statutory agency charged with promoting
and improving gender equality in Australian workplaces
• Modern Slavery Act 2018: requires certain large businesses
and other entities in Australia to make annual public
reports on their actions to address modern slavery risks
in their operations and supply chains
ORGANISATIONAL GOVERNANCE
Good corporate governance is the basis on which business
objectives and stakeholder value depend. Ramelius regularly reviews
governance practices and policies in order to incorporate changes in
law and best practice into our governance processes.
Through our Risk & Sustainability Committee, the Board oversees
sustainability strategy, measures performance and considers
sustainability risks and opportunities. Day-to-day oversight of
sustainability operations and administration is the responsibility of
our CEO, who in turn delegates specific responsibilities to the senior
management team.
We follow the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations: 3rd Edition which
require the Board to carefully consider the appropriate corporate
governance policies and practices needed to meet stakeholder
expectations.
We also take guidance where possible from the Mining Principles
published by the International Council on Mining & Metals (ICMM).
These define good practice environmental, social and governance
requirements for the mining and metals industry through a
comprehensive set of performance expectations related to tailings
management, pollution, waste, resettlement and mine closure.
Our Corporate Governance Statement is released in October each
year. The most recent statement is available on our website2.
2 www.rameliusresources.com.au/wp-content/uploads/bsk-pdf-manager/2019/10/ASX-2019-Corporate-Governance-Statement-and-Appendix-4G.pdf
41
Annual Report 2020 SUSTAINABILITY REPORT (CONTINUED)
OUR BUSINESS (continued)
GOVERNANCE REPORTING
In the 2020 financial year, Ramelius bolstered governance functions by splitting out our Audit & Risk Committee into an Audit Committee
and a Risk & Sustainability Committee to ensure appropriate levels of oversight across key governance topics. Our governance structure for
sustainability is as follows:
Board of Directors
Audit Committee
Nomination &
Remuneration Committee
Risk & Sustainability
Committee
CEO
Operations
Finance &
Business
Development
Exploration
Corporate
We also updated a number of our sustainability policies in the 2020 financial year , namely those defining the way in which we approach:
• Human Resources (HR) management, including whistleblowing
• Community consultation
• Indigenous people
• Risk management
• Health, safety and environment (HSE)
The committee functions under a newly created Risk & Sustainability Committee Charter3. Further details of our corporate governance
framework, policies and practices are available on our website4.
RISK MANAGEMENT
Risk management at Ramelius is overseen by our Board of Directors.
The Board, Executive Team, Audit and Risk & Sustainability
Committees regularly review the risk portfolio of the business and
the effective management of risks. In the 2020 financial year a new
project was initiated to create a best practice risk management
framework. As a multi-year endeavour, it is a work in progress but
we look forward to reporting progress in the 2021 financial year.
Risk registers are held for each of our sites as well as the corporate
office and are managed by the respective work group with oversight
provided by our HSE Managers. Each risk register is formally
reviewed and updated at least annually and is used in the budget
planning process to prioritise expenditure in an effort to mitigate
risk. Further information can be found in the Risk & Sustainability
Charter and Risk Management Policy.
INNOVATION AND RESEARCH
Innovation is a key element of the Ramelius business and is
recognised as a driver for efficiency, improvement and waste
reduction. Ramelius also recognises the power of partnerships
to develop innovative ways to unlock economic, environmental
and social value and is committed to collaborative research and
development.
Through our partnership with Australia’s national science agency
CSIRO, we are involved in cutting-edge research seeking to improve
efficiencies in gold exploration and to support innovation in the
Australian mining industry.
42 Ramelius Resources
3 https://www.rameliusresources.com.au/wp-content/uploads/bsk-pdf-manager/2020/08/2020-Risk-Sustainabilty-Committee-Charter.pdf
4 www.rameliusresources.com.au/corporate-governance/
CSIRO researchers John Walshe and Adam Bath logging and sampling historical diamond drill core
from the Mount Magnet core farm
CASE STUDY 1: CSIRO RESEARCH
Ramelius is supporting innovative and ground-breaking research
into mineral exploration being undertaken by Australia’s national
science agency the Commonwealth Scientific and Industrial Research
Organisation (CSIRO).
The research is a collaboration between CSIRO, Ramelius, together
with a number of other Australian gold producers and supported
by the Western Australian Government through the Minerals
Research Institute of WA (MRIWA).
The work is aimed at improving efficiencies in gold exploration and
advancing Australia’s development of a productive, sustainable and
globally-competitive mineral resources industry. It is producing a
new understanding of mineralisation in the WA’s Yilgarn Province
and follows CSIRO’s previous development of new technology for
an environmentally-superior gold recovery process.
Source: https://www.csiro.au/en/News/News-releases/2020/CSIRO-uncovers-innovative-approach-to-
gold-exploration
Annual Report 2020
43
SUSTAINABILITY REPORT (CONTINUED)
OUR PEOPLE
Health, safety and wellbeing
Employment and
contractors
Talent attraction,
development and retention
Ramelius recognises that employees lie at the
heart of our current and future prosperity. At
all times our priority is to keep our people safe,
healthy and fulfilling their potential.
HEALTH, SAFETY AND WELLBEING
SAFETY
Ramelius is committed to providing a working environment that
adheres to best practice health and safety requirements for all our
employees and contractors as well as any members of the public
that are impacted by our operations. This is achieved by:
• Complying with legislation and standards relating to health and
safety in the workplace
• Fostering a culture promoting workplace health and safety in the
best interests of all participants
• Regular site safety meetings to encourage identification of issues
and continual improvement, including incident investigations and
reporting to the Board
• Strict mine site entry procedures and requirements, including
enforcement of our drug and alcohol policy and testing of site
personnel
• Documented and regular review of emergency procedures and
processes, ongoing staff safety training and risk management
processes
In the 2020 financial year, Ramelius achieved safety frequency rates
of 18.3 for Total Recordable Injury Frequency Rate (TRIFR) and 8.14
for Lost Time Injury Frequency Rate (LTIFR).
In the 2021 financial year, we will focus on education and taking
action across our operations in order to further improve our TRIFR
and LTIFR rates. We will also continue developing and standardising
HSE systems across all our sites to identify areas in which we can
better understand and improve health and safety.
44
“Safety is a ‘given’ at Ramelius and the safety and welfare of
all personnel working at any of our operations are our key
priorities. We follow a risk based and fit for purpose approach
to the development, implementation and management of
health and safety at our operations. Everyone that works at
our operations is empowered to discuss and manage safety
challenges every day.”
- Duncan Coutts, Ramelius Resources Chief Operating Officer
Management of health and safety is handled by our health and
safety team. At all times, we strive to increase the number of
proactive safety systems and strategies being implemented across
all our sites. This includes undertaking regular systems development
and standardisation for existing sites and rolling out the process
for new sites.
Ramelius uses the INX system for data management of incident
reporting and investigation outcomes and training records. A new
module has now been added to the INX system for online learning
which has a number of benefits and we have committed to this
learning approach. A review of the overall system and benefits will
be included in our 2021 Sustainability Report.
HEALTH AND WELLBEING
Ramelius takes a proactive approach to the health and well-being
of our workforce. Our vision is to create a physically and mentally
healthy working environment with improved workforce participation
and increased social inclusion. We aim to do this by fostering more
supportive and engaging team environments in order to increase
resilience, enhance positive early intervention and reduce negative
mental health outcomes.
Ramelius Resources SUSTAINABILITY REPORT (CONTINUED)
OUR PEOPLE (continued)
COVID-19 RESPONSE
In the 2020 financial year , Ramelius consolidated and standardised
the medical service being provided to employees across all our
operations. A competitive tender process was undertaken and in
October 2019 dedicated medical service provider - Occupational
and Environmental Medicine (OccuMed), was appointed to oversee
health provision across our business. Through OccuMed, Ramelius
provides the following services:
• Pre-employment medicals
• Periodical medicals
• Fitness-for-work testing
• Workers compensation and injury management services
• Tele-health service
• Remote medical support
To ensure our personnel are fit for the role that they are employed
to do, in the 2020 financial year we also created 40 Job Role Profiles
(JRP). This approach ensures that all new recruits are now medically
assessed against the correct JRP before being employed.
To ensure the health and safety of every person working at
Ramelius, their families and communities during the COVID-19
pandemic, we operate all our sites in strict adherence to advice
from State and Federal health authorities. This minimises risk from
the COVID-19 pandemic to our employees and the communities in
which we operate.
In the 2020 financial year, there was no material impact on
Ramelius’s operations from COVID-19. Ramelius continues to
employ a variety of approaches to mitigate the impacts of the
pandemic in accordance with requirements outlined by the Australia
Government Health Department, the Government of Western
Australia’s Health Department and WA’s Department of Mines,
Industry Regulation and Safety.
Our medical service provider OccuMed has also developed a
Medical Management Plan to address issues arising from the
COVID-19 pandemic. This plan is reviewed and updated regularly by
OccuMed and communicated to operational sites for actioning.
EMERGENCY RESPONSE TEAM (ERT)
Each site has a core group of ERT volunteers who support
the fulltime emergency personnel in regard to emergency
preparedness. Site ERT target numbers are developed and
agreed upon with site management teams and are based on
a thorough analysis of the type of activities being undertaken
and the size of the workforce. The ERT is made up of both
employees and contractors’ team members.
Four new Certificate III in Mine Emergency Response and
Rescue courses were run during 2020 financial year . A total
of 39 people completed courses in Certificate III in Mine
Emergency Response and Rescue across our three operational
sites during the 2020 financial year.
The overall growth in trained ERT members at all the Ramelius
sites provides an increased level of confidence regarding
response capability and capacity at all times.
Emergency response team (ERT) training
45
Annual Report 2020 SUSTAINABILITY REPORT (CONTINUED)
ETHICAL BEHAVIOUR
All employees, including contractors working for or on behalf
of Ramelius are required to adhere to overarching principles set
out in our Code of Conduct Policy. This requires all employees and
contractors to observe appropriate standards of behaviour, ethics
and integrity as a condition of their employment.
Our working values include honesty, fairness and respect and our
culture is defined by a ‘fit-for purpose and can-do’ attitude. The
Code of Conduct Policy includes the following expectations from our
employees and contractors:
• Honesty and fairness in all dealings with customers, co-workers,
management and the public
• Respect for our equipment, supplies and property
• Zero tolerance for discrimination, harassment or offensive
language and/or behaviour in the workplace
• Adherence to appropriate Professional Codes of Practice and/or
ethic
• Zero tolerance for postings on any social media platform material
that could reasonably be deemed inappropriate or unlawful,
including posts that are bullying, threatening, defamatory, racist,
sexist, obscene, discriminatory or profane, whether obscured by
symbols or not, which contravene any existing Company policy or
standards
WHISTLEBLOWING
In the 2020 financial year, Ramelius introduced a whistleblower
mechanism through our Human Resource Management Policy to
enable all directors and employees to report, without the risk of
penalty or retribution to themselves or others, concerns about any
questionable conduct or practice.
This is in accordance with the whistleblower protections outlined in
the Corporations Act 2001 (Corporations Act) which were expanded
on 1 July 2019 to provide greater legal rights and protections
for whistleblowers as regulated by the Australian Securities &
Investments Commission (ASIC). Further information is available in
our Code of Conduct and Human Resource Management Policy.
OUR PEOPLE (continued)
EMPLOYMENT AND CONTRACTORS
DIVERSITY AND EQUAL OPPORTUNITY
Ramelius acknowledges that benefits flow from a workforce
comprised of individuals who come from diverse backgrounds
and offer a range of skills and experiences. This helps create a
high performing, innovative environment that in turn benefits our
organisation.
As outlined in our Diversity Policy, Ramelius is committed to
recruiting the best candidates to fill available positions regardless of
gender, age, religion or cultural background.
Our Diversity and Human Resource Management Policies together
with our Code of Conduct Policy enshrine our commitment to
operate a workplace free from discrimination and harassment,
in which individuals are treated with respect, equity, dignity and
fairness. The Policies and Code set out the procedures to address
grievances and complaints including those relating to discrimination,
harassment and bullying.
Further information is provided in our Human Resource Management
Policy, Diversity Policy and 2019 Workplace Gender Equality Public
Report5.
KEY DIVERSITY METRICS IN 2020
20% of our Board of Directors is female
14% of senior leaders are female
33% of new hires were female
HUMAN RIGHTS
Ramelius is guided by the UN Guiding Principles on Business and
Human Rights and the Voluntary Principles on Security and Human
Rights (VPSHR) to respect the human rights of all stakeholders,
ensuring the fundamental freedoms and basic human rights of all
individuals. This commitment is reinforced by our Modern Slavery and
Human Rights Policy.
Our Modern Slavery Statement will be published in 2021 and will
cover our expectations regarding risks of modern slavery in our
operations and supply chains and the action being taken to address
those risks. This is in accordance with the Commonwealth Modern
Slavery Act 2018: Guidance for Reporting Entities.
5 www.rameliusresources.com.au/wp-content/uploads/bsk-pdf-manager/2019/10/2019-Workplace-Gender-Equality-Public-Report.pdf
46
Ramelius Resources SUSTAINABILITY REPORT (CONTINUED)
OUR PEOPLE (continued)
TALENT ATTRACTION, DEVELOPMENT AND RETENTION
DEVELOPING AND REWARDING OUR PEOPLE
We provide opportunities and support to employees to improve the skills, knowledge and qualifications that are required for the
performance of their existing roles and for improving their prospects of promotion to other internal roles.
Informal annual performance reviews were conducted for all employees in the 2020 financial year. Additional training, including mines rescue
training, was also offered to enhance employee performance and effectiveness.
Salaries are set on the basis of the level of responsibility of the position, technical skills and qualifications required to perform the role, and
are professionally benchmarked against industry standards and peers on an annual basis.
DEVELOPING THE NEXT GENERATION
Ramelius aims to create a bright future for students and graduates entering the mining
industry by offering work placements, graduate programs and apprenticeships. Our
graduate program offers university graduates a flexible program that aims to support
them in their transition from study to career.
In the 2020 financial year, we have one apprentice and seven graduate students, three
of whom are female. The program is designed to support, challenge and reward
graduates in a work environment that will foster and develop them into future leaders
and technical experts.
Ramelius supports the WA School of Mines Wallabies, a non-profit, student run
organisation that participates in events and programs like the Australian Institute of
Mining and Metallurgy (AusIMM) National Mining Competition and New Leaders
Conferences, international collegiate mining competitions and orientation weeks.
We also offer a scholarship to support students from all backgrounds realise their full
potential. More information can be found in Case Study 2 below.
From left to right WA School of Mines Wallabies: Sherran De Silva,
CEO Mark Zeptner and Benjamin Fallows
CASE STUDY 2: BOB KENNEDY
SCHOLARSHIP
In memory of former Chairman, Robert (Bob) Kennedy, Ramelius
offer a scholarship to support students from all backgrounds
realise their full potential. The scholarship is open to any Ramelius
employee or those with a family connection to Ramelius. The
Scholarship provides up to $10,000 to the cost of course fees,
books, computing and other related study fees.
“It’s been the biggest help in starting my university courses and
it’s been really nice getting to know some of the staff at Ramelius”
2019 scholarship recipient Jade Rotherham, Bachelor of Science
(Environment Science and Zoology)
Annual Report 2020
47
SUSTAINABILITY REPORT (CONTINUED)
OUR COMMUNITIES
Indigenous and native title
Taxes, royalties and supplier
payments
Community relations and
investment
Ramelius believes that meaningful stakeholder
engagement and partnerships empower the
community, build trust and decrease
operational risk.
Our approach to social responsibility ensures that we deliver
sustainable and long-lasting social and economic benefits to native
titleholders, local communities and interest holders in the regions
in which our projects are located. We are guided by our Community
Consultation Policy.
INDIGENOUS COMMUNITIES AND
NATIVE TITLEHOLDERS
Ramelius considers native titleholders and indigenous communities
as one of our core stakeholder groups. We strive to work from a
position of respect for indigenous culture, traditions and cultural
sites and endeavour to foster a spirit of cooperation, with the aim of
creating goodwill, mutual awareness, understanding and respect.
As outlined in our Indigenous Peoples Policy, we work with Aboriginal
representatives to improve communication and better understand
the views and beliefs of the indigenous communities local to
our operations. We will be guided by the Native Title Legislation
Amendment Bill 2019 in all of our future dealings over native title
negotiations.
We aim to ensure that employees and contractors approach
culturally significant sites with respect and a clear understanding
of importance of the land to indigenous communities. We are
committed to taking appropriate steps to identify and reduce the
effects of any unforeseen impacts from its activities on indigenous
communities, land, culture, traditions and cultural sites.
In order to increase our understanding of indigenous culture and our
connections with indigenous communities, we have been involved in
a number of educational, cultural and sporting initiatives, examples
of which are provided in Case Studies below.
CASE STUDY 3: INDIGENOUS CULTURAL CONTRIBUTION
THROUGH THE MOUNT MAGNET BENEFIT FUND
Since 2015, the Ramelius Community Benefit Fund (RCBF) has helped support Indigenous community groups to undertake
social, community and recreational projects in the Mount Magnet area through approximately $60,000 in total grants per
year and over $300,000 over the last 5 years. In the 2020 financial year, the Fund supported the following organisations:
• Badimia Land Aboriginal Corporation (BLAC): manages heritage and land projects for the Badimia People in conjunction
with Heritage Link, including promoting Badimia art and culture, fostering training, employment and business
opportunities and operating the Wirnda Barna Art Centre: badimia.org.au
• Shine Inspire Achieve Belong Inc (SHINE): collaborates with WA secondary schools to actively connect with adolescent
female students from Aboriginal and Torres Strait Islander backgrounds who are at risk of disengaging from the
conventional education system: shinetoday.com.au
48 Ramelius Resources
SUSTAINABILITY REPORT (CONTINUED)
OUR COMMUNITIES (continued)
TAXES, ROYALTIES AND SUPPLIER PAYMENTS
In the 2020 financial year, we engaged local community stakeholders
through our Greenfinch project consultation, Tampia community
meeting and informal interactions in our local Shires.
Through the payment of taxes, government royalties, workforce
wages and supplier payments, Ramelius makes a significant financial
contribution to local, regional and national economies. In the 2020
financial year , we contributed over $476.1 million to the Australian
economy through the following mechanisms:
Ramelius recognises that financial and in-kind contributions are
a critical aspect of community investment and support. Our
community investments are carefully considered to ensure they
create a positive impact on the communities and its members, as
well as aligning with our business priorities.
• Goods and services: $366.5 million
• Wages: $46.0 million
• Taxes: $35.2 million
• Royalties: $19.3 million
• Dividends: $6.6 million
• Interest: $0.3 million
• State and shire rent: $2.2 million
• Community contributions and donations: over $400,000
COMMUNITY RELATIONS AND INVESTMENT
We are committed to involving local and indigenous communities
in the areas in which we operate in planning and decision-making
and ensuring accountability through effective communication and
consultation strategies.
In the 2020 financial year, we donated approximately $400,000
to support initiatives and groups seeking to build lasting, positive
community impact. We also made $55,000 worth of in-kind
donations towards additional events and programs.
Some of our major donations went to the Shire of Mount Magnet’s
Community Benefit Fund, the Starlight Children’s Foundation,
the MACA Cancer 200 Challenge, Netball WA, the feature film
The Furnace set in WA’s 1890s gold rush, and the Gold Industry
Group (GIG). An overview of the wide range of community-
related projects in which Ramelius has been involved through our
membership of GIG is provided in the following Case Study which
includes a snapshot of grants provided to local community groups.
49
Annual Report 2020 CASE STUDY 4: GOLD INDUSTRY GROUP
COMMUNITY INITIATIVES
Through our membership of the Gold Industry Group
(GIG), Ramelius supports a wide range of initiatives
covering communities, education, youth sport, diversity,
tourism, indigenous advancement, health and safety,
environment and economic growth. These include:
• Educational and sporting pathways for women and
indigenous communities through Netball WA
of which GIG is a Premier Partner. This includes
annual scholarships to assist student netballers
pursue a career in gold mining and Leadership
Camps held with Netball WA’s Aboriginal All
Stars to help young indigenous players develop
their leadership qualities, prioritise health and well-
being and improve their netball skills.
o Mental health and well-being through Lifeline
WA, and
o Food provision for disadvantaged communities
through Foodbank WA.
• Pathways in Australia’s gold industry for jobseekers,
employees, students and teachers through
Gold Jobs, a central online hub of employment
opportunities;
• Education in science, technology, engineering and
mathematics (STEM) in Australian primary and
secondary schools across four states through
GIG’s National Gold Education Program in
conjunction with Earth Science WA (ESWA);
• Sporting opportunities, facilities and equipment for
young female Aboriginal and Torres Strait Islanders
through the Shooting Stars netball team of which
GIG is a Premier Partner.
• GIG’s annual Women in Gold Great Diversity
Debate in Perth, Sydney and Melbourne which
promotes gender diversity in the Australian gold
mining industry;
• Over $9 million donated by GIG as part of the
• Gold tourism initiatives and businesses to drive
COVID-19 Community Support Initiative set up
by the Chamber of Minerals and Energy of WA
supporting:
o Remote medical provision through the Royal
Flying Doctor Service (RFDS),
economic growth across WA’s gold mining region
through GIG’s Heart of Gold Australia app
which promotes Perth and Kalgoorlie Heart of
Gold Discovery Trails and the other gold tourism
experiences.
50
Ramelius Resources
SUSTAINABILITY REPORT (CONTINUED)
OUR ENVIRONMENT
Water
Emissions and energy
Waste, effluents, air pollution
Ramelius is committed to attaining an outstanding level of
environmental performance across all of our operations. We
have a social responsibility to not only achieve all legislative
compliance expectations but also to strive for best practice in
meeting the environmental expectations of the communities in
which we operate.
Our environmental activities are instructed by our HSE Policy which
outlines guiding environmental principles and a commitment to
environmental sustainability and conducting our business activities in
an environmentally responsible manner.
Ramelius operates all mine sites in accordance with the
policies, regulations and environmental requirements outlined
in Western Australia’s Mining Act 1978. All our operations
have been assessed under a rigorous risk and outcomes-based
environmental assessment process with clear objectives to ensure
the environmental risk assessment and setting of site-specific
environmental outcomes is consistent with the expectations of
our stakeholders. Approved projects are then commenced and
monitored to protect the environmental values of the areas in which
we operate.
Environmental data on water, air emissions and energy is collated
annually across our operations and verified by third party auditors
Greenbase. Ramelius has used the 2020 financial year to establish
a baseline environmental monitoring process. This will help us
measure our environmental performance and enable us to strive for
year-on-year improvements.
WATER
Ramelius recognises that the semi-arid geographical locations of our
operations are in some of the most water-deprived regions of the
WA’s Wheatbelt and the Goldfields. The climate in these areas is
mostly hot and dry with variable annual rainfall of around 340mm
and 250mm per year respectively. We are cognisant of water being
a valuable resource, not just to our operations but also to the towns
and pastoralists of the districts in which we operate.
We aim to demonstrate optimal water management by using this
resource responsibly and efficiently and by maximising our re-use of
water from Tailings Storage Facilities (TSF), minimising our reliance
on natural surface and groundwater sources and preferentially
utilising sources of saline water instead of fresh water.
Each of our sites complies with stringent water licensing conditions
which have been placed on the mines to ensure our operational
impacts are ecologically-sustainable, environmentally-acceptable, not
prejudicial to other current and future needs for water and unlikely
to have a detrimental effect on another person or another source.
In the 2020 financial year, we abstracted a total 3,551ML of raw
(saline) water for all our sites, with an additional 677ML of recycled
water used. Recycling and re-using water from TSFs not only
reduces demand on natural sources of surface and groundwater, but
also saves on process plant chemical costs and maintains the safe,
dewatered operation of TSFs.
In the 2021 financial year, we will continue accessing sources of
saline water for our operations in preference to fresh water in
order to free up more potable water for the communities in which
we operate.
51
Annual Report 2020 SUSTAINABILITY REPORT (CONTINUED)
OUR ENVIRONMENT (continued)
ENERGY AND EMISSIONS
The mining sector recognises the contributions the industry makes
to global greenhouse gas emissions (GHG) and climate change.
Ramelius recognises that climate-related risk may impact our
business and we have a responsibility to reduce our emissions.
As a first step, we are collating and reporting annual GHG
emissions, energy production and energy consumption data
and improvement initiatives in line with National Greenhouse
and Energy Reporting (NGER).
Where our sites are located in close proximity to WA’s electricity
grid, we preferentially utilise this source to power our sites
particularly for the energy-intensive processing hub operations at
Mt Magnet and Edna May. Our remote regional sites use diesel for
electricity provision which is closely monitored and rationalised
where possible.
This year, we sourced a total 1,847,953Gj of electricity from
the grid and diesel generation. In the 2021 financial year, we will
focus on improving efficiencies in consumption rate across all of
our operations.
Our total Scope 1 and 2 emissions were 140,442 t CO2e.
WASTE, EFFLUENTS AND AIR POLLUTION
Mining operations have the potential to generate significant streams
of non-hazardous and putrescible waste including tyres, batteries, oil,
grease and other hydrocarbon-contaminated wastes, food scraps,
metals, cardboard, glass, plastic, and aluminium.
The remote, isolated locations of our regional mine sites generally
mean recycling these wastes can be costly and impractical for the
business. To counter this, Ramelius continually aims to reduce the
burden of these waste streams in the first instance by limiting them
from coming to site and then being placed in landfill.
All sites contractually oblige suppliers to provide products with
minimal packaging where possible, and to use licensed waste
transport companies to send waste oils and other hydrocarbons for
recycling at dedicated facilities.
Other waste products include effluent from wastewater treatment
plants which is treated in accordance with licensed standards prior
to discharge. An example of the way in which we are working to
improve the use of wastewater treatment is outlined in Case Study
5 Wastewater treatment at Edna May.
Dust pollution from mining and trucking activities can reduce
air quality. Procedures are in place across all our mine sites to
reduce dust generation by watering surfaces with saline water
and monitoring dust deposition levels at sensitive environmental
receptor locations.
CASE STUDY 5: WASTEWATER
TREATMENT AT EDNA MAY
Following an upgrade to the effluent wastewater treatment
plant at our Edna May operation, all wastewater is now
treated to WA Department of Health standards, making it
suitable and safe for irrigating local public playing fields under
agreement with the Shire of Westonia.
Ramelius benefits from reusing this important source of
water and the community and the environment benefits
by eliminating reliance on town supply of fresh potable
water from the Goldfield Water Supply Scheme pipeline,
freeing up the resource for other uses.
Westonia Oval, Shire of Westonia
52
Ramelius Resources
SUSTAINABILITY REPORT (CONTINUED)
In the 2020 financial year, each operation reviewed its approved
Mine Closure Plan with Ramelius also commissioning an independent
review of our closure cost provisioning in order to refine and
improve our methodology, address closure knowledge gaps and
replace cost assumptions with up-to-date rates.
During the 2020 financial year, Ramelius had a total tenement land
holding package of 347,617 hectares, of which land disturbed by
mining totalled just 1,788 hectares (0.51%). The amount of land
currently under rehabilitation, which includes land that has been
fully rehabilitated and relinquished, is 583 hectares which equates to
32.6% of disturbed land restored.
BIODIVERSITY
Ramelius adheres to environmental objectives and regulations
that seek to protect fauna, flora and vegetation so that biological
diversity and ecological integrity are maintained. Each new greenfield
project and proposed operational expansion is subjected to rigorous
environmental baseline and impact assessment studies, undertaken
to a standard consistent with best practice guidance to ensure our
projects avoid and minimise impacts to biodiversity.
Occasionally, significant fauna, flora and vegetation are encountered
during surveys and additional levels of planning are required to
manage and mitigate unacceptable potential impacts. One such
example occurred at the Edna May Operations for the newly
proposed Greenfinch Project, which is outlined in the Case
Study on page 54.
All of Ramelius’ baseline biodiversity study reports are submitted
to environmental regulators during the mining project permit
application process. The information contributes to Western
Australia’s environmental and biodiversity datasets which then
provides a broader decision-making base for regulators, an expanded
knowledge base of the State’s flora and fauna, and improved
availability of environmental information for the community to
create better environmental outcomes for the State.
6 https://www.rameliusresources.com.au/environment/
OUR ENVIRONMENT (continued)
TAILINGS MANAGEMENT
Ramelius builds, owns and operates two Tailings Storage Facilities
(TSF) across our mining operations. The design, construction,
operation and closure of these facilities is strictly controlled by
government regulation, codes of practice and relevant guidelines,
as well as our own internal standards, procurement policies and
contractor management processes.
The chosen location, design, construction method, operational
strategy, monitoring and surveillance, emergency response planning
and rehabilitation of each TSF undergoes a rigorous risk and
environmental impact assessments prior to approval.
Specialist engineers are engaged by Ramelius to ensure all factors
that can potentially impact on the long-term performance of each
TSF are considered and all risks are addressed. The design process is
complex, but repeatable and rigorous, and ensures the integrity and
safety of each TSF’s during:
• normal and irregular operation
• extreme weather and events
• decommissioning
The priority is to ensure that our TSFs are safe, stable, erosion-
resistant, and non-polluting after tenement relinquishment.
Ramelius also completes detailed and regular inspections and
auditing of our operating TSFs, including the preparation and
implementation of a site-specific TSF Operating Manual which sets
out the safe and environmentally-acceptable operating procedures,
monitoring and reporting requirements, trigger levels and actions to
be taken to rectify any potential deficiencies.
Audit reports are lodged with relevant regulators demonstrating our
compliance with all conditions. Regulations also require Ramelius to
use independent TSF consultant engineers for the design and annual
inspection of our TSFs as well as requirements for the provision
of information, instruction, training and supervision that assures
the integrity of facilities and the occupational safety and health of
personnel working at them. More information can be found in the
Management of Tailings Report6 on our website
REHABILITATION AND CLOSURE MANAGEMENT
Ramelius strives to revegetate our disturbances in a manner that
promotes biological diversity and ecological integrity.
All our operations work to keep land clearing and disturbed ground
to an absolute minimum. In order to develop the knowledge and
capabilities to meet stakeholder expectations on mine rehabilitation
and closure, we work to progressively rehabilitate mining
disturbances as effectively as possible during the lifetime of
our operations.
53
Annual Report 2020 Photos of Eremophila Resinosa and the Eucalypt Woodlands
CASE STUDY 6: GREENFINCH PROJECT,
WESTERN AUSTRALIA
The Greenfinch Project lies approximately 2km north of
the Westonia township in WA’s Wheatbelt region. Initial
plans for the mining development required vegetation
clearing of some 62.3 hectares which was previously
surveyed for biological diversity.
Much of the vegetation (39.1 hectares) within the
proposed project footprint had been mapped as
Eucalypt Woodlands of the WA Wheatbelt and listed
as Critically Endangered under the Environment
Protection and Biodiversity Conservation Act 1999
(EPBC Act), a Threatened Ecological Community
(TEC) and a Priority Ecological Community for WA.
Additional assessments undertaken by Ramelius
identified that the vegetation type:
• Provides potential foraging habitat for the
nationally-endangered Carnaby’s Black-Cockatoo
• Provides habitat for the critically-endangered Arid
Bronze Azure Butterfly
• Contains the Eremophila Resinosa, a flowering
figwort plant, which is a Declared Rare Flora
species under the WA Biodiversity Conservation Act
2016, listed as Endangered under the EPBC Act,
and ranked as Endangered under the IUCN Red
List of Threatened Species.
Ramelius responded to the potential risk to habitat
by engaging government regulators and advisory
departments, NGOs and interest groups, subject
matter experts and local communities to re-design a
project footprint that avoided or at worst minimised
the impacts to manageable and acceptable levels.
Using the baseline biodiversity and species studies,
we were ultimately able to re-design the Greenfinch
Project so that just 16.6 hectares of conservation-
significant vegetation was cleared (a 57% reduction)
with no loss of any Eremophila resinosa plants.
54
Ramelius Resources
SUSTAINABILITY REPORT (CONTINUED)
PERFORMANCE DATA
SAFETY
Safety performance
Mill Production
Employee fatalities
Contractor fatalities
Total Recordable Incident Frequency Rate (TRIFR)
Employee Total Recordable Incident Frequency Rate (TRIFR)
Contractor Total Recordable Incident Frequency Rate (TRIFR)
Lost Time Injury Frequency (LTIF )
Lost Time Injuries
Restricted work
Medical treatment injuries
Unless specified, all classifications above include contractors.
Emergency Rescue Teams (ERT)
2020
-
-
18.3
6.79
17.76
8.14
13
21
20
Total
PEOPLE
Diversity
Profile 2020
Mt Magnet
Edna May
25
19
Vivien
11
Full time
employee
M
209
F
33
Part time
employee
Full time contract
Part time
contract
Casual
Employees total Workforce
M
1
F
2
M
-
F
-
M
-
F
-
M
13
F
1
M
223
F
36
Total
259
Level 2020 - including
contractors
Board
Leadership
Managers
M
5
F
1
M
7
F
1
M
12
F
1
Professional /
Trade
M
145
F
17
Operator
M
54
F
14
New Employees 2020
Age group <36
Age group 36–55
Age group >55
Employees total
Total
M
33
F
7
M
14
F
9
M
8
F
2
M
55
F
18
73
Turnover 2020
Age group <36
Age group 36–55
Age group >55
Total
M
43
F
9
M
21
F
5
M
18
F
-
96
Site Profile 2020
Corporate
Mt Magnet
Edna May
Vivien
Exploration
M
20
M
4
-
F
8
F
3
1
Developing our
approach to diversity
and inclusion
Graduate
Apprentice
M
93
F
18
M
88
M
10
M
6
F
4
M
19
F
5
M
226
Total
7
1
Total
F
45
All
271
55
Annual Report 2020 SUSTAINABILITY REPORT (CONTINUED)
PERFORMANCE DATA (continued)
ENVIRONMENT
Environmental compliance and incidents
Monetary value of significant fines ($A)
2020 environmental Incidents
Total volume of significant spills (ML)
Energy
Energy consumption (GJ)
Total
Energy intensity
(ore processed - GJ/tonne)
Total
Emissions
Total direct and indirect emissions
Greenhouse gas emissions Scope 1
(t CO2-e)(1)
Greenhouse gas emissions Scope 2
(t CO2-e)(2)
Total of Scope 1 and Scope 2 (t CO2-e)
-
33
-
2020
1,847,953
0.44
2020
105,215
35,227
140,442
Water
Water withdrawal Surface (ML) water
Bore water - saline (ML)
Total water withdrawal
Recycled (ML)
% Total reused
Water intensity (ore processed-kL/
tonne)
2020
3,551
3,551
677
19%
0.84
Waste
Mineral waste
Total
Tailings
Asset
Number of active TSF
Number of inactive TSF
Construction Type (eg.
Downstream, HDPE Lined,
Upstream, IWL)
Acid-generating seepage
Waste material
mined (kt)
20,568
Total ore
processed (kt)
4,235
Mt Magnet
1
4
Edna May
1
-
Upstream
IWL
Asset
Mt Magnet
Edna May
Vivien
The energy and emissions boundary is based on operational control
as defined by the National Greenhouse and Energy Reporting (NGER)
Act 2007. The applied global warming potential (GWP) rates and
emission factors are based on the NGER Act (2007) and the National
Pollutant Inventory.
Predicted to occur
Actively mitigated
Under treatment or
remediation
(1) Scope 1 refers to emissions produced directly by operations, primarily resulting
Rehabilitation and closure
-
-
-
-
-
-
-
-
-
from combustion of various fuels and includes CO2-equivalent values for
greenhouse gases such as CH4, N20 and SF6.
(2) Scope 2 refers to indirect emissions resulting from the import of electricity from
external parties; commonly the electricity grid.
Land management
(ha)
2020 Total
Land disturbed
1,788
Land
rehabilitated
583.04
Sites with
protected
conservation
status
-
56
Ramelius Resources SUSTAINABILITY REPORT (CONTINUED)
PERFORMANCE DATA (continued)
SOCIAL RESPONSIBILITY
Socioeconomic contribution
(A$) million
Operations Employees
Region
Supplier
payments
(Goods and
services)
Local suppliers, rates and employees
National economy (excluding local
suppliers and employees)
Total
3.8
362.7
366.5
Economic contribution
Wages
2.2
43.8
46.0
Contributed into Australian Economy (A$) million
Direct spend with community organisations (A$) million
Reconciliation to income tax payable
Profit before income tax expense
Permanent differences
Temporary differences:
– Accounting and tax depreciation differences
– Mine development
– Exploration and evaluation expenditure
– Provisions
– Other
Taxable income before utilisation of carried forward tax losses
Australian income tax payable
Corporate income tax paid during the year ended June 2020
Utilisation of carried forward losses
2020 R&D refund expected
Net income tax payable/(receivable)
Community and cultural heritage
Material Cultural Heritage incidents
Material Community Impact incidents
2020 R&D refund expected
Net income tax payable/(receivable)
Payments to
providers of
capital
Dividend
payments to
shareholders
-
6.6
6.6
Payments
to financial
Payments to government
Total
contribution
Interest
Taxes
Royalties
State and
Shire Rent
-
35.2
35.2
-
19.3
19.3
2.2
-
2.2
8.2
467.9
476.1
-
0.3
0.3
2020
476.1
8.2
2020
(A$) million
149.5
4.5
(0.4)
(23.2)
(35.1)
(4.0)
4.0
95.3
28.6
(1.2)
(6.1)
-
21.3
2020
-
-
-
21.3
57
Annual Report 2020 ANNUAL
FINANCIAL REPORT
Directors’ report
Directors and Company Secretary
Principal activities
Key highlights for the year
Dividends
Events since the end of the financial year
Operations review
Financial review
Development and exploration projects
Investor Relations
Material business risks
Environmental regulation
Information on Directors
Meetings of Directors
Remuneration report
Shares under option
Insurance of officers and indemnities
Proceedings on behalf of the company
Non-audit services
Auditor independence
Rounding of amounts
Auditor’s independence declaration
Financial statements
Financial statements
Notes to the financial statements
Signed reports
Directors’ declaration
Independent auditor’s report to the members
60
60
60
60
61
61
61
62
65
65
66
67
68
70
70
79
79
79
80
80
80
81
83
84
89
137
137
138
58
Ramelius Resources
FOR THE
FINANCIAL YEAR
ENDED JUNE 2020
59
Annual Report 2020 DIRECTORS’ REPORT
Your Directors present their report on the consolidated entity consisting of Ramelius
Resources Limited and the entities it controlled at the end of, or during, the year ended
30 June 2020. Throughout the report, the consolidated entity is referred to as Ramelius
or the group. Unless specifically noted, all dollar amounts disclosed in this report are
Australian Dollars (A$ or AUD).
DIRECTORS AND COMPANY SECRETARY
The following persons were Directors of Ramelius Resources Limited during the whole of the financial year and up to the date of this report:
Mark Zeptner
Michael Bohm
David Southam
Kevin Lines was a Director of Ramelius Resources Ltd during the whole of the financial year and up to 30 September 2020.
Natalia Streltsova was appointed as a Director on 1 October 2019 and continued in office at the date of this report.
The Company Secretary is Richard Jones. Mr Jones has nearly 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.
PRINCIPAL ACTIVITIES
The principal activities of the group during the year included exploration, mine development, mine operations and the production and sale of gold.
There were no significant changes to those activities during the year.
KEY HIGHLIGHTS FOR THE YEAR
Acquisition of the Penny Gold Project (Spectrum Metals Limited)
The Penny Gold Project was the primary asset of Spectrum Metals Limited (Spectrum), which was acquired by Ramelius during the year.
The Penny Gold Project is located 130km south-east of the Mt Magnet mining and processing operations and approximately 500km north-east of
Perth in Western Australia. The Penny Gold Project currently has a Mineral Resource of 300,000 ounces and an Ore Reserve of 230,000 ounces
(refer to ASX Announcement dated 30 June 2020 ‘Ramelius Extends Life of Mine Plan by 34% to 1.45Moz’ for full details).
On 10 February 2020 Ramelius announced an off-market takeover offer for Spectrum Metals Limited. Under the offer Spectrum shareholders
received one (1) Ramelius share for every ten (10) Spectrum shares held and cash consideration of A$0.017 for each Spectrum share held.
On the same day, the Spectrum Board unanimously recommended that Spectrum shareholders accept the Ramelius offer in the absence of a
superior proposal.
Control was attained on 17 March 2020 with Ramelius holding a relevant intertest in Spectrum of 50.50%, or 727,402,825 Spectrum shares.
Ramelius obtained 100% control on 23 June 2020.
A total of $28.9 million cash consideration (net of cash acquired) was paid along with 145,203,969 Ramelius shares issued to Spectrum Share and
Option holders as part of the offer. Acquisition costs totalled $11.7 million which includes stamp duty on the transaction (which as at 30 June 2020
was not yet finalised).
Commencement of mining operations at the Marda Gold Project
The Mining Proposal and Mine Closure Plan for the Marda Gold Project were approved in September 2019 with site works and ore mining
commencing shortly thereafter. A total of 449k tonnes were mined in the financial year at a grade of 1.78 g/t for 25,656 ounces of contained gold.
As at 30 June 2020 a total of 276k tonnes of ore was stockpiled at site awaiting haulage to Edna May for processing.
The Marda Gold Project is located 176km by road north-northeast of the Edna May operations and is amenable to processing at the existing Edna
May facilities. The Marda Gold Project has a Mineral Resource of 300,000 ounces and an initial Ore Reserve of 89,000 ounces. The Marda Gold
Project was acquired in the 2019 financial year via the acquisition of Black Oak Minerals Limited (in Liquidation).
Commencement of mining operations at the Greenfinch open pit (Edna May)
On 3 October 2019 Ramelius was advised that the revised Clearing Permit application for the Greenfinch open pit project, adjacent to
the company’s Edna May gold operations in Western Australia, had been granted by the Department of Mining, Industry Regulation and
Safety (DMIRS).
On 28 January 2020 Ramelius further received the final Federal Controlled Action environmental approval to proceed with the project.
Clearing and grade control drilling commenced in February 2020 with ore mining following in March 2020. A total of 117k tonnes were mined in
the financial year at a grade of 0.89 g/t for 3,380 ounces of contained gold. Mine performance has been in line with the mine plan and grades are
expected to increase as the pit reaches depth.
There were no other significant changes in the state of affairs of the group that occurred during the financial year not otherwise disclosed in this
report or the financial statements.
60
Ramelius Resources DIRECTORS’ REPORT (continued)
COVID-19
The COVID-19 virus had no material impact to the operations of Ramelius with the company implementing several measures that it believes go
beyond just the formal guidance issued by State and Federal health authorities. Ramelius has defined clear processes throughout the organisation
to ensure that all employees and contractors do their absolute best to control the risk of infection and transmission of COVID-19. Initiatives
implemented include:
• Travel: suspending international travel and restricting non-essential domestic and intrastate travel.
•
•
•
•
Social distancing: utilising video and phone conference facilities, reducing face-to-face interactions, and increasing flexible working arrangements
wherever possible.
Health management: proactive temperature testing and screening of individuals prior to entering the company’s sites or corporate offices, strict
hygiene practices, along with the securing of clinical masks, hand sanitiser, and COVID-19 swab test kits. In addition, plans were put in place for
the isolation, testing, and rapid removal from site of any employee or contractor displaying flulike symptoms.
Planning: the addition of a number of casual employees to be available in the event of the loss of team members from any part of the business
as well as the constant management and review of the supply chain.
Communication: constant liaison with WA Health Department, through our consultant occupational doctor and medical provider, to ensure
best practice as far as possible with the ever-changing regime around controlling the virus. In addition to this there was frequent communication
across the entire work force regarding COVID-19 and company protocols.
All Ramelius mine operations are located within Western Australia which has enabled the group to have a dynamic, rapid, and consistent approach
to the management of the COVID-19 virus. Whilst at the date of this report the COVID-19 situation in Western Australia seems to be relatively
under control, management continues to diligently monitor and be in a position to respond quickly to the ongoing COVID-19 virus.
DIVIDENDS
Dividends recommended but not yet paid
Since the end of the 2020 financial year the Directors have recommended the payment of a fully franked final dividend of 2.0 cents per fully paid
share. The fully franked final dividend will have a record date of 2 September 2020 and a payment date of 2 October 2020.
The financial effect of the final dividend has not been brought to account in the financial statements for the year ended 30 June 2020 but will be
recognised in subsequent financial reports.
Dividends paid
Dividends paid
Final ordinary dividend for the 2019 financial year
of 1 cent (2019: nil) per fully paid share paid
on 4 October 2019
2020
$M
2019
$M
6.6
-
Table 6: Dividends paid to members during the 2020 financial year.
EVENTS SINCE THE END OF THE FINANCIAL YEAR
No matter or circumstance has arisen since 30 June 2020 that has significantly affected the group’s operations, results, or state of affairs, or may
do so in the future.
OPERATIONS REVIEW
A review of the group’s operations for the year is discussed in the ‘Review of Operations’ section of this Annual Report which commences
on page 12.
61
Annual Report 2020 DIRECTORS’ REPORT (continued)
FINANCIAL REVIEW
Financial performance *
Revenue
Cash costs of production
Gross margin excluding ‘non-cash’ items
Amortisation and depreciation
Inventory movements
Gross profit
Earnings before interest and tax (EBIT)
Net finance costs
Mt
Magnet
$M
Edna
May
$M
Corp
and other
$M
Group
2020
$M
2019
$M
Change
$M
Change
%
324.3
136.3
(157.8)
166.5
(70.5)
38.4
134.4
134.4
-
(84.6)
51.7
(32.6)
17.7
36.8
36.8
-
-
-
-
-
-
-
460.6
352.8
(242.4)
(210.2)
218.2
(103.1)
56.1
171.2
142.6
(81.3)
(17.7)
43.6
30.7
(0.3)
107.8
(32.2)
75.6
(21.8)
73.8
127.6
121.8
(2.7)
+ 31%
+ 15%
+ 53%
+ 27%
- 417%
+ 293%
+ 397%
+ 900%
(18.7)
152.5
(3.0)
(3.0)
Profit / (loss) before income tax
134.4
36.8
(21.7)
149.5
30.4
119.1
+ 392%
Income tax expense
-
-
(36.1)
(36.1)
(8.6)
(27.5)
+ 320%
Profit / (loss) for the year
134.4
36.8
(57.8)
113.4
21.8
91.6
+ 420%
* Note that the 2019 comparative information has not been restated for the impact of AASB 16 Leases as per that Standard. Refer to Note 13 of the financial statements for
further details on the impact of the application of AASB 16 Leases.
Table 7: 2020 Financial performance
Revenue reconciliation
$65.7
$460.6
$0.9
M
$
A
$475
$450
$425
$400
$375
$350
$325
$43.0
$352.8
2019 sales
revenue
Volume
Average
gold price
Silver and
other sales
2020 sales
revenue
Figure 8: Revenue reconciliation between 2020 and 2019
62
Ramelius Resources DIRECTORS’ REPORT (continued)
Revenue
Revenue for the year ended 30 June 2020 increased by 31% to $460.6 million compared to $352.8 million for the year ended 30 June 2019.
This excellent result was achieved with an increase in gold production of 17% coupled with a 17% increase in the average realised gold price.
• Mt Magnet gold sales increased by 36% or 43,699 ounces due to the higher grades as discussed within this report.
•
•
Edna May gold sales decreased by 23% or 18,807 ounces due to the lower tonnages being milled as discussed within this report.
The realised gold price for the year was $2,014 per ounce being a 17% increase on the 2019 realised gold price of $1,726 per ounce.
This was below the average spot price for the year with some gold being delivered into forward contracts.
• The average price of the hedge book as at 30 June 2020 increased 16% over the year to $2,135 per ounce (2019: $1,834 per ounce).
•
•
Silver sales were comparable year on year.
Other sales decreased $0.9 million in 2020 with the 2019 year other income including the gain on sale of equipment at Edna May as the mine
moved to a contractor model when operations focussed on the underground development.
Earnings before interest and tax (EBIT)
The EBIT for Ramelius increased 397% to $152.5 million for the year ended 30 June 2020 compared to $30.7 million for the year ended
30 June 2019. This record result was achieved on higher A$ gold prices, higher production and sales through an increase in head grades and a
continued focus on maintaining control over costs across the business.
For the group the overall cost per tonne increased 7% however it is important to note that this is the result of a change in the proportional ore
feed of the group with more tonnes being sourced from the higher cost, but much higher grade, underground mines at both sites. As a result of
the increase in grades across the group the overall cost per ounce decreased 16% from the 2019 financial year with the EBIT margin increasing
nearly fourfold to 33.1% (2019: 8.7%).
Whilst gold production is up, it was achieved on lower tonnages which has resulted in total operating costs being 6% down on the prior year.
The chart below demonstrates the impact of this on the EBIT for the year.
Looking at the operations individually the costs per tonne are comparable to the 2019 financial year, this is discussed further below.
Reconciliation of earnings before interests and tax (EBIT)
$19.9
$6.8
$152.5
$43.0
M
$
A
$180.0
$160.0
$140.0
$120.0
$100.0
$80.0
$60.0
$40.0
$20.0
0
$65.7
$30.7
2019 EBIT
Improved gold
price
Increased
volume
Operating
costs
Corp
and other
2020 EBIT
Figure 9: Reconciliation of movement in EBIT from 2019 to 2020
63
Annual Report 2020 DIRECTORS’ REPORT (continued)
Mt Magnet delivered an EBIT of $134.4 million for the year ended 30 June 2020 which was up from the $14.5 million EBIT for the corresponding
prior period. Profitability at Mt Magnet was up on 2019 due to higher grades and higher realised gold prices in the 2020 financial year. The cost
per tonne at Mt Magnet was down 1% on the prior year with the low cost Eridanus tonnes being mitigated in part by the availability of the more
expensive, but higher grade, underground tonnes.
With operating costs per tonne being comparable year on year, the main driver of the increased profitability has been the higher grades at
Mt Magnet which brings the operating cost per ounce down by 27%. Grades were up at Mt Magnet as a result of 50% more underground ore
being available at a grade 21% higher than the prior year. The Mt Magnet grades are discussed in further detail in the operations review section of
this report.
Edna May delivered an EBIT of $36.8 million for the year ended 30 June 2020 compared to $29.1 million for the year ended 30 June 2019. The
operations at Edna May have changed substantially over the year with the processing plant operating on a 12 day on / 9 day off roster from
October 2019 to March 2020. The main source of ore for the Edna May plant during the year was the low grade ore stockpiles which were
supplemented by underground ore throughout the year. Greenfinch and Marda ore commenced milling in the fourth Quarter of the financial year
with less reliance being placed on the low grade stockpiles. (negligible amounts of Marda ore were milled in the March 2020 Quarter).
Importantly, the low grade ore at Edna May was both cashflow and earnings positive during the year.
The Greenfinch and Marda ore will continue to be the primary source of ore feed at Edna May in the 2021 financial year.
Corporate and other costs increased from those in 2019 due to an impairment of previously capitalised exploration and evaluation assets.
A total of $6.3 million of exploration and evaluation assets were impaired at 30 June 2020. These impairments related to exploration activities
across the group’s portfolio with the main areas of interest incurring an impairment being Coogee, as the company dilutes below 90% equity;
Marda, where reconnaissance exploration has downgraded several targets; a re-prioritising of several peripheral targets at Mount Magnet as
shallower opportunities take precedence in the short to medium term; and ongoing impediments to exploration outside Australia caused by
COVID-19, suggesting it’s prudent to impair the Jupiter JV in the US.
In addition to the exploration and evaluation asset impairment, the other main driver of the increase in corporate and other costs from those in
2019 has been the share-based payments expense, which is non-cash. These costs relate to the options and performance rights on issue with the
value of these equity instruments being expensed over the vesting period for the right or option (typically three years).
Net Profit After Tax (NPAT)
Net profit after income tax increased 420% (or $91.6 million) to $113.4 million for the year ended 30 June 2020 (2019: $21.8 million).
Net finance costs of $3.0 million, which include interest income, interest expense, and non-cash financing costs relating to the unwinding of discount
rates and the impact of the adoption of AASB 16 Leases (refer to Note 13 of the financial statements), were $2.7 million higher than the 2019
financial year due to the establishment and draw down of the Syndicated Facility Agreement during the year and a decline in the interest rate
market.
The effective tax rate of the group for the year ended 30 June 2020 was 24% compared to 28% for the year ended 30 June 2019. The effective
tax rate has reduced with group recording a $10.1 million one-off tax benefit on the unused tax loses transferred from Explaurum Operations Pty
Limited. This is discussed further in Note 3 to the financial statements.
Balance Sheet
The net assets of the group increased 85% over the year as a result of a strong net profit after tax and the acquisition of Spectrum.
Current assets increased 78% largely as a result of cash and cash equivalents (see comments below) and inventories, which increased 138% due to
strong mining performance at Mt Magnet and the accumulation of stockpiles at Marda. As at 30 June 2020 the group had over 91,000 ounces of
gold in ore stockpiles, gold in circuit, and bullion on hand.
Non-current assets increased 98% due to the acquisition of Spectrum, investments in mine development (Marda and Greenfinch), and the
introduction of AASB 16 Leases which resulted in $29.7 million of right-of-use assets being recorded as property, plant and equipment.
Current liabilities of the group increased by 207% which has been largely attributable to the draw down on borrowing facilities, the introduction of
AASB 16 Leases (current lease liability of $16.6 million), and Ramelius becoming a tax payer with tax payable for the 2020 financial year estimated at
$21.3 million. In addition to this trade and other payable increased 83% to $82.3 million due to a stamp duty accrual on the Spectrum acquisition,
increased royalty payables with the higher gold price and significant fourth Quarter performance. An increase in creditors and accruals is not
unexpected given the significant increase in activities in FY20 as compared to this time last year. Non-current liabilities increased 22% mainly due to
the introduction of AASB 16 Leases (non-current lease liability of $13.8 million).
Cashflow
The net cash flow from operations for the year were up 72% (or $99.1 million) on the 2019 financial year to $236.0 million (2019: $137.0 million).
This increase is attributable to the increase in gold sales revenue (gold production and gold price driven – see figure 8 within this report) as well as
lower operating costs with the lower tonnages being milled. Offsetting these positive cashflow movements has been the build-up of gold and ore
stockpiles over the year (mostly relating to Eridanus and Marda).
64
Ramelius Resources DIRECTORS’ REPORT (continued)
During the year a total of $56.1 million was added to gold and ore stockpiles for future monetisation, this compared to the drawdown of ore
stockpiles and gold on hand in the 2019 financial year of $17.7 million.
A total of $170.8 million was re-invested during the year which included:
• Payments (including acquisition costs) for the Penny Gold Project (Spectrum Metals Ltd) (net of cash acquired) of $30.7 million.
• Payments for the development of open pit and underground mines of $105.0 million.
• Payments for property, plant and equipment of $16.2 million.
• Payments for mining tenements and exploration of $18.4 million.
During the year, a Syndicated Facility Agreement (SFA) was executed with the Commonwealth Bank of Australia, BNP Paribas, and the National
Australia Bank. The SFA and associated documents provided for the provision of working capital and performance bond facilities totalling A$35
million. The facility was established to provide financial support for working capital purposes but also for any corporate asset acquisitions that the
Company may undertake at a future date. The SFA has been structured such that the quantum available could be increased subject to the approval
of the syndicate members including the completion of satisfactory due diligence on the company or asset in question.
A total of $32.5 million was drawn on the SFA in March 2020 to provide the company with additional working capital, should it be needed, during
the global COVID-19 pandemic. In accordance with the SFA the first repayment of $8.1 million took place in June 2020. The bank loan under the
SFA is repayable in full before 30 June 2021.
Free cash flow# for the year was $96.4 million (2019: $51.8 million). Cash on hand at the end of the financial year was $165.7 million compared to
$95.8 million at 30 June 2019. As at 30 June 2020 a total of 7,681 ounces (2019: 5,465 ounces) of gold was on hand with the reported cash and
gold bullion on hand at 30 June 2020 being $185.5 million (2018: $106.8 million). After taking into account the borrowings the reported net cash
and gold position as at 30 June 2020 was $161.1 million.
Financial Risk Management
Ramelius held forward gold sales contracts at 30 June 2020 totalling 247,350 ounces of gold at an average price of A$2,135 per ounce over a
period to December 2022.This compared to forward gold sales contracts at 30 June 2019 totalling 240,900 ounces of gold at an average price of
A$1,834 per ounce over a period to August 2021.
Up until March 2020 the group increased the level of price protection in line with the increased production profile. However, since the outbreak of
COVID-19 a concerted effort was made to reduce the price protection with a focus on delivery into contracts with minimal additions to the hedge
book. In line with the increasing AUD gold prices and prudent hedge book management the average price of the forward sales has increased 16%.
As noted in prior ASX releases the current intention of the Company’s forward sales policy is to maintain approximately one (1) years’ worth of
production hedged over a period of approximately three (3) years.
DEVELOPMENT AND EXPLORATION PROJECTS
A review of the group’s development and exploration projects for the year is discussed in the ‘Review of Operations’ section of this Annual Report
which commences on page 12.
INVESTOR RELATIONS
During the year the company presented at several conferences (both in person and virtually) and conducted road shows to existing and prospective
investors, analysts and stockbrokers. These included:
• Diggers and Dealers Conference, Kalgoorlie, August 2019
• Citi’s Inaugural Gold Corporate Day, Sydney, September 2019
• Denver Gold Conference, Colorado, September 2019
• RIU Conference, Fremantle, February 2020
• Morgan’s Virtual Gold Conference, March 2020
• Goldman Sachs Gold Virtual Forum, May 2020
• Various investor mine site visits
• Various investor presentations in Sydney, Melbourne, Perth and virtually
Each presentation that contained new content was released to the ASX and was made available on both the ASX (www.asx.com.au) and the
Ramelius Resources website (www.rameliusresources.com.au).
# Free cash flow is defined as operating cash flows less payments for development, exploration, and property, plant and equipment.
65
Annual Report 2020 DIRECTORS’ REPORT (continued)
MATERIAL BUSINESS RISKS
The material business risks for the group include:
•
COVID-19: Ramelius continues to actively respond to the ongoing COVID-19 virus currently impacting people and businesses globally.
The health and safety of every person working at Ramelius, their families and our communities remains paramount during this time. To
date there has been no material impact on Ramelius’ operations from the COVID-19 virus.
Ramelius continues to operate under protocols developed to minimise risks to our people and communities and ensure we can safely produce
gold during this challenging period.
Initiatives implemented include:
- Travel: suspending international travel and restricting non-essential domestic and intrastate travel.
-
-
-
-
Social distancing: utilising video and phone conference facilities, reducing face-to-face interactions, and increasing flexible working
arrangements wherever possible.
Health management: proactive temperature testing and screening of individuals prior to entering the company’s sites or corporate offices,
strict hygiene practices, along with the securing of clinical masks, hand sanitiser and COVID-19 swabs test kits. In addition, plans were put in
place for the isolation, testing, and rapid removal from site of any employee or contractor displaying flulike symptoms.
Planning: the addition of several casual employees to be available in the event of the loss of team members from any part of the business as
well as the constant management and review of the supply chain.
Communication: constant liaison with WA Health Department, through our consultant occupational doctor and medical provider, to
ensure best practice as far as possible with the ever-changing regime around controlling the virus. In addition to this there was frequent
communication across the entire work force regarding COVID-19 and company protocols.
•
•
•
•
Fluctuations in the United States Dollar (USD) spot gold price and AUD/USD exchange rate: The financial results and position of the
group are reported in Australian dollars. Gold is sold throughout the world based principally on the U.S. dollar price. Accordingly, the group’s
revenues are linked to both the USD spot gold price and AUD/USD exchange rate. Volatility in the gold price creates revenue uncertainty and
requires careful management to ensure that operating cash margins are maintained should there be a sustained fall in the AUD spot
gold price. The group uses AUD gold forward contracts, within certain Board approved limits, to manage exposure to fluctuations in the
AUD gold price.
Government regulation: The group’s mining, processing, development and exploration activities are subject to various laws and statutory
regulations governing prospecting, development, production, taxes, royalty payments, labour standards and occupational health, mine safety,
toxic substances, land use, water use, communications, land claims of local people and other matters.
No assurance can be given that new laws, rules and regulations will not be enacted or that existing laws, rules and regulations will not be
applied in a manner which could have an adverse effect on the group’s financial position and results of operations. Any such amendments to
current laws, regulations and permits governing operations and activities of mining and exploration, or more stringent implementation thereof,
could have a material adverse impact on the group.
Operating risks and hazards: The group’s mining operations, consisting of open pit and underground mines, involve a degree of risk.
The group’s operations are subject to all the hazards and risks normally encountered in the exploration, development and production of
gold. Processing operations are subject to hazards such as equipment failure, toxic chemical leakage, loss of power, fast-moving heavy
equipment, failure of tailings disposal pipelines and retaining dams around tailings containment areas, rain and seismic events which may result in
environmental pollution and consequent liability. The impact of these events could lead to disruptions in production and scheduling, increased
costs and loss of facilities, which may have a material adverse impact on the group’s results of operations, financial condition, license to operate
and prospects. These risks are managed by a structured operations risk management framework, experienced employees and contractors
and formalised procedures. Ramelius also has in place a comprehensive insurance program with a panel of experienced industry supportive
underwriters.
Production, cost and capital estimates: The group prepares estimates of future production, operating costs and capital expenditure relating
to production at its operations. The ability of the group to achieve production targets or meet operating and capital expenditure estimates on
a timely basis cannot be assured. The assets of the group are subject to uncertainty with regards to ore tonnes, grade, metallurgical recovery,
ground conditions, and operational environment. Failure to achieve production, cost or capital estimates, or material increases to costs, could
have an adverse impact on the group’s future cash flows, profitability and financial condition. The development of estimates is managed by the
group using a rigorous budgeting and forecasting process. Actual results are compared with forecasts and budgets to identify drivers behind
discrepancies which may result in updates to future estimates.
•
Exploration and development risk: An ability to sustain or increase the current level of production in the longer term is in part dependent on
the success of the group’s exploration activities and development projects, and the expansion of existing mining operations.
The exploration for, and development of, mineral deposits involves significant risks that even a combination of careful evaluation, experience
and knowledge may not eliminate. While the discovery of an ore body may result in substantial rewards, few properties that are explored
subsequently have economic deposits of gold identified, and even fewer are ultimately developed into producing mines. Major expenses may be
required to locate and establish mineral reserves, to establish rights to mine the ground, to receive all necessary operating permits, to develop
metallurgical processes and to construct mining and processing facilities at a particular site.
66
Ramelius Resources
DIRECTORS’ REPORT (continued)
•
Ore Reserves and Mineral Resources: The group’s estimates of Mineral Resources and Ore are based on different levels of geological
confidence and different degrees of technical and economic evaluation, and no assurance can be given that anticipated tonnages and grades
will be achieved, that the indicated level of recovery will be realised or that Ore Reserves could be mined or processed profitably. The quality
of any Mineral Resources and Ore Reserves estimate is a function of the quantity of available technical data and of the assumptions used in
engineering and geological interpretation, and modifying factors affecting economic extraction. Such estimates are compiled by experienced
and appropriately qualified personnel and subsequently reported by Competent Persons under the JORC Code. Fluctuation in gold prices,
key input costs to production, as well as the results of additional drilling, and the evaluation of reconciled production and processing data
subsequent to any estimate may require revision of such estimates.
Actual mineralisation of ore bodies may be different from those predicted, and any material variation in the estimated Ore Reserves, including
metallurgy, grade, dilution, ore loss, or stripping ratio at the group’s properties may affect the economic viability of its properties, and this may
have a material adverse impact on the group’s results of operations, financial condition and prospects. There is also a risk that depletion of
reserves will not be offset by discoveries or acquisitions, or that divestitures of assets will lead to a lower reserve base. The reserve base of the
group may decline if reserves are mined without adequate replacement and the group may not be able to sustain production beyond current
mine lives, based on current production rates.
•
Climate Change: Ramelius acknowledges that climate change effects have the potential to impact our business. The highest priority climate
related risks include reduced water availability, extreme weather events, changes to legislation and regulation, reputational risk, and technological
and market changes. The group is committed to understanding and proactively managing the impact of climate related risks to our business.
This includes integrating climate related risks, as well as energy considerations, into our strategic planning and decision making.
ENVIRONMENTAL REGULATION
Regulations
The operations of the group in Australia are subject to environmental regulations under both Commonwealth and State legislation. In the mining
industry, many activities are regulated by environmental laws as they may have the potential to cause harm and/or otherwise impact upon the
environment. Therefore, the group conducts its operations under the necessary State Licences and Works Approvals to carry out associated
mining activities and operate a processing plant to process mined resources. The group’s licences and works approvals are such that they are subject
to audits both internally and externally by the various regulatory authorities. These industry audits provide the group with valuable information
in regard to environmental performance and opportunities to further improve systems and processes, which ultimately assist the business in
minimising environmental risk.
Reporting
Due to the various licences and works approvals the group holds, annual environmental reporting (for a 12-month period) is a licence and works
approval condition. The group did not experience any reportable environmental incidents for the reporting year 2019-2020. Regulatory agencies
requiring annual environmental reports are outlined below but are not limited to the following:
• Department of Water and Environmental Regulation (DWER)
• Department of Mines, Industry Regulation and Safety (DMIRS)
• Tenement Condition Report
• Native Vegetation Clearing Report
• Mining Rehabilitation Fund (MRF) Levy
• National Pollutant Inventory (NPI)
• National Greenhouse and Energy Reporting Scheme (NGERS)
• Bureau of Land Management.
Sustainability
The group is committed to environmental performance and sustainability and works closely with the regulatory authorities to minimise the
environmental impact and achieve sustainable operations. Where the business can, continuous improvement processes are implemented to improve
the operation and environmental performance. The group seeks to build relationships with all stakeholders to ensure that their views and concerns
are taken into account in regard to decisions made about the operations, to achieve mutually beneficial outcomes. This includes current operations,
future planning and post closure activities
67
Annual Report 2020 DIRECTORS’ REPORT (continued)
INFORMATION ON DIRECTORS
The following information is current as at 30 June 2020
KEVIN LINES
BSc (Geology), MAusIMM, MAICD
Independent Chairman
Non-Executive
Experience
Mr Lines is a geologist and has more
than 35 years’ experience in mineral
exploration and mining for gold, copper,
lead, zinc and tin. He has held senior
geological management positions with
Newmont Australia Limited, Normandy
Mining Limited and the CRA group of
companies. He was the foundation Chief
Geologist at Kalgoorlie Consolidated
Gold Mines where he led the team that
developed the ore-body models and
geological systems for the Super-Pit
Operations in Kalgoorlie.
Interest in Shares and Options
1,000,000 Ordinary Shares
Special responsibilities
Chairman of the Board
Member of Audit Committee
Member of Nomination and
Remuneration Committee
Member of Risk and Sustainability
Committee
Directorships held in other listed
entities in the last three years
None
MARK ZEPTNER
BEng (Hons) Mining, MAusIMM,
MAICD
Managing Director and
Chief Executive Officer
Experience
Mr Zeptner has more than 25 years’
industry experience including senior
operational and management positions
with WMC and Gold Fields Limited
at their major gold and nickel assets
in Australia and offshore. He joined
Ramelius Resources Limited on
1 March 2012 as the Chief Operating
Officer, was appointed Chief Executive
Officer on 11 June 2014 and Managing
Director effective 1 July 2015.
Interest in Shares and Options
4,512,500 Ordinary Shares
500,000 Performance Rights over
Ordinary Shares expiring on
11 June 2026
322,342 Performance Rights over
Ordinary Shares vesting on 1 July 2020
and expiring on 1 July 2027
568,956 Performance Rights over
Ordinary Shares vesting on 1 July 2021
and expiring on 1 July 2028
644,683 Performance Rights over
Ordinary Shares vesting on 1 July 2022
and expiring on 1 July 2029
Special responsibilities
Chief Executive Officer
Directorships held in other listed
entities in the last three years
None
MICHAEL BOHM
B.AppSc (Mining Eng), MAusIMM,
MAICD
Independent Director
Non-Executive
Experience
Mr Bohm is a mining engineer with
extensive corporate and operational
management experience in the minerals
industry in Australia, South East Asia,
Africa, Chile, Canada and Europe. He is
a graduate of the WA School of Mines
and has worked as a mining engineer,
mine manager, study manager, project
manager, project director and Managing
Director. He has been directly involved
in many project developments in the
gold, base metals and diamond sectors in
both open pit and underground mining
environments.
Interest in Shares and Options
637,500 Ordinary Shares
Special responsibilities
Chairman of Nomination
and Remuneration Committee
Member of Risk and Sustainability
Committee
Directorships held in other listed
entities in the last three years
Non-Executive Chairman of Cygnus
Gold Limited
Non-Executive Director Mincor
Resources NL
Previously a Non-Executive Director
of Perseus Mining Limited
68
Ramelius Resources DIRECTORS’ REPORT (continued)
INFORMATION ON DIRECTORS (CONTINUED)
DAVID SOUTHAM
B.Comm, CPA, MAICD
Independent Director
Non-Executive
NATALIA STRELTSOVA
MSc, PhD (Chem Eng), GAICD
Independent Director
Non-Executive
Experience
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.
Interest in Shares and Options
Nil
Special responsibilities
Chairman of Audit Committee
Member of Nomination
and Remuneration Committee
Directorships held in other listed
entities in the last three years
Managing Director of Mincor
Resources NL
Previously Executive Director of
Western Areas Limited
Previously Non-Executive Director of
Kidman Resources Limited
Experience
Dr 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.
Interest in Shares and Options
Nil
Special responsibilities
Chair of Risk and Sustainability
Committee
Member of Audit Committee
Directorships held in other listed
entities in the last three years
Non-Executive Director of Western
Areas Limited
Non-Executive Director of Neometals
Limited
Previously Non-Executive Director of
Parkway Minerals Limited
69
Annual Report 2020 DIRECTORS’ REPORT (continued)
MEETINGS OF DIRECTORS
The number of meetings of the company’s Board of Directors and each Board Committee held during the year ended 30 June 2020, and number
of meetings attended by each Director were:
Director
Kevin Lines
Mark Zeptner
Michael Bohm
David Southam
Natalia Streltsova
Meetings of Committees
Full meetings of
Directors
Audit Committee
Nomination and
Remuneration
Committee
Risk and
Sustainability
Committee
A
17
16
17
17
10
B
17
17
17
17
12
A
5
-
3
5
2
B
5
-
3
5
3
A
4
-
4
3
-
B
4
-
4
4
-
A
1
-
1
-
1
B
1
-
1
-
1
A = Number of meetings attended; B = Number of meetings held during the time the Director held office or was a member of the Committee during the year.
REMUNERATION REPORT (AUDITED)
The Directors present the Ramelius Resources Limited 2020 remuneration report, outlining key aspects of our remuneration policy and
framework, and the remuneration awarded this year. This remuneration report is prepared in accordance with the requirements of the Corporations
Act 2001 (the Act) and its regulations. This information has been audited as required by section 308(3C) of the Act.
The remuneration report details the remuneration arrangements for key management personnel (KMP) who are defined as those persons having
authority and responsibility for planning, directing and controlling the major activities of the group, directly or indirectly, and is a direct report to
the Managing Director / Chief Executive Officer. This includes any directors (executive and non-executive) of Ramelius Resources Limited, the Chief
Financial Officer, Chief Operating Officer, General Manager – Exploration, and the Manager Legal / Company Secretary.
The report is structured as follows:
(a) Key management personnel covered in this report
(b) Remuneration governance
(c) Remuneration policy and framework
(d) Elements of remuneration
(e) Link between remuneration and performance
(f) Contractual arrangements for executive KMP
(g) Non-executive director arrangements
(h) Details of KMP remuneration
(i) Other statutory information
(a) Key management personnel covered in this report
Name
Position
Directors of the group during the financial year were:
Kevin Lines
Mark Zeptner
Michael Bohm
David Southam
Natalia Streltsova
Non-Executive Chairman
Managing Director / Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director (appointed 1 October 2019)
The KMP during the financial year were:
Tim Manners
Duncan Coutts
Kevin Seymour
Richard Jones
Chief Financial Officer
Chief Operating Officer
General Manager – Exploration
Manager Legal / Company Secretary
Details on the Executive and Non-Executive Directors can be found on pages 68 to 69 of the Directors’ report.
70
Ramelius Resources DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (CONTINUED)
(b) Remuneration governance
The Nomination and Remuneration Committee (NRC) is a Committee of the Board. It is primarily responsible for making recommendations to the
Board on:
• Non-executive director fees;
• Executive remuneration (directors and executives); and
• The executive remuneration framework and incentive plan policies.
The objective of the NRC is to ensure that remuneration policies and structures are fair and competitive and aligned with the long-term interests of
the company. In performing its functions, the NRC may seek advice from independent remuneration consultants.
(c) Remuneration policy and framework
Ramelius has adopted a policy that aims to attract, motivate and retain a skilled executive team focused on contributing to its objective of creating
wealth and adding value for its shareholders. The remuneration framework has been formed on this basis. The remuneration framework is based
on several factors including the experience and performance of the individual in meeting key objectives of Ramelius.
The objective of the executive remuneration framework includes incentives that seek to encourage alignment of management performance and
shareholder interests. The framework aligns executive rewards with strategic objectives and the creation of value for shareholders and conforms to
market practices for delivery of rewards.
In determining executive remuneration, the NRC aims to endeavour that remuneration practices are:
• Competitive and reasonable, enabling the company to attract and retain and incentivise key talent.
• Aligned to the company’s strategic and business objectives and the creation of shareholder value.
• Distinctly demonstrate a link between performance and remuneration.
• Structured to have a suitable mix of fixed and performance related variable components.
• Acceptable to shareholders.
• Transparent.
The executive remuneration framework is designed to ensure market competitiveness and achievement of the remuneration objective. The
remuneration of executives is:
•
Benchmarked from time to time against similar organisations both within the industry and of comparable market size to ensure uniformity
with market practices.
• A reflection of individual roles, levels of seniority and responsibility that key personnel hold.
• Structured to take account of prevailing economic conditions.
• A mix of fixed remuneration and at-risk performance-based elements using short and long-term incentives.
The executive remuneration framework has three components:
• Base pay and benefits, including superannuation.
• Short-term performance incentives.
• Long-term incentives through participation in the Performance Rights Plan as approved by the Board.
The combination of these comprises an executive’s total remuneration package. Incentive plans are regularly reviewed to ensure continued
alignment with financial and strategic objectives.
(d) Elements of remuneration
Ramelius remunerates its executives with a total remuneration package (TRP) that consists of two components:
• Total fixed remuneration.
• Total variable remuneration.
The total variable remuneration ensures an executive’s remuneration is aligned to the group’s performance. This portion of an executive’s
remuneration is considered “at risk”. Variable remuneration can be in the form of either a short-term incentive (STI) or a long-term incentive (LTI).
71
Annual Report 2020
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (CONTINUED)
Total fixed remuneration
Total fixed remuneration (TFR) comprises of base salary, superannuation, and any fringe benefits tax charges related to employee benefits.
The group allows a KMP to salary sacrifice certain items such as superannuation and motor vehicles (on a total cost basis).
Remuneration levels are reviewed annually in June by the NRC through a process that considers individual performance and the overall
performance of the group. Industry remuneration surveys and data are utilised to assist in this process. There are no guaranteed base pay
increases included in any executive contracts.
Short-term incentives
Short-term incentives allow executives to earn an annual incentive which is linked the group’s annual performance.
How is it paid?
Any STI awards are typically paid in cash after the assessment of the annual performance is made.
How much can an executive
earn?
In the 2020 financial year the Managing Director / Chief Executive Officer was able to earn a maximum STI
of 75% of the TFR. Other executives were able to earn a maximum STI of 45% of their TFR.
In conjunction with the group’s key performance measures detailed below, a comprehensive review of each
executive’s individual performance is made to determine the achievable percentage (between 0% - 100%) of the
maximum potential STI available to be awarded. This may result in the proportion of remuneration related to
performance varying between individual executives.
How is performance
measured?
A structured set of key performance measures have been selected which are core drivers of short-term
performance as well as considered important for the group’s growth and profitability.
For any STI to be paid two ‘gates’ must be passed, these are:
• No loss of life at any project site.
• No serious environmental, heritage, or community related breach.
The KPI’s used to measure performance for the Managing Director / Chief Executive Officer are:
• Net profit after tax relative to budget
• Gold production relative to budget
• All in sustaining cost (AISC) relative to budget
• Discovery/Reserve addition to Life of Mine Plan
30%
20%
30%
20%
The KPI’s used to measure performance for the other KMPs are as follows. Ranges are shown as the
particular weighting varies depending on the role of the KMP:
• Net profit after tax relative to budget
• Gold production relative to budget
• All in sustaining cost (AISC) relative to budget
• Discovery/Reserve addition to Life of Mine Plan
20 - 30%
20 - 30%
20 - 30%
20 - 40%
The performance is measured relative to the budget with threshold, target, and stretch cases considered.
The STIs are payable at the absolute discretion of the Board. There are several modifiers considered by
the Board which may result in a downward reduction in the STIs paid.
When is it paid?
The STI award is determined following a review of the financial results, operations, changes to the Life-Of-Mine
Plan and the annual Resources and Reserves Statement by the NRC. This typically occurs in the second Quarter
of the financial year. No amount is provided for or included in the financial report and remuneration report until
such review has taken place.
Based on this assessment, the STI cash payments for the 2019 financial year which were paid in the 2020 financial year are detailed in the following
table:
Name
Position
Mark Zeptner
Tim Manners
Duncan Coutts
Kevin Seymour
Richard Jones
1 Amounts disclosed above include superannuation attributable to the STI.
Managing Director / Chief Executive Officer
Chief Financial Officer
Chief Operating Officer
General Manger – Exploration
Manager Legal / Company Secretary
Maximum STI1
Achieved STI1
%
60%
45%
45%
45%
45%
$
363,000
187,308
204,188
144,401
136,125
%
46%
44%
40%
40%
34%
$
254,100
165,000
165,000
115,500
93,500
72
Ramelius Resources
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (CONTINUED)
Long-term incentives
Under the Ramelius Performance Rights Plan, annual grants of performance rights are made to executives to align remuneration with the creation
of shareholder value over the long-term. The LTIs are designed to focus executives on delivering long-term shareholder returns.
How is it paid?
LTIs are provided to selected executives under the Ramelius Performance Rights Plan. Selected executives are
eligible to receive performance rights (being entitlements to shares in Ramelius subject to satisfaction of vesting
conditions) as long-term incentives as determined by the Board in accordance with the terms and conditions of
the plan.
How much can an
executive earn?
The plan provides selected executives the opportunity to participate in the equity of Ramelius through the issue
of rights as a long-term incentive that is aligned to the long-term interests of shareholders.
Under the Performance Rights Plan, the number of rights granted to executives ranges up to 40% (60% for
the Managing Director / Chief Executive Officer) of the executive’s TFR and is dependent upon the individual’s
skills, responsibilities and ability to influence financial or other key objectives of Ramelius. The number of rights
granted is calculated by dividing the LTI remuneration dollar amount by the volume weighted average price of
Ramelius shares traded on the Australian Securities Exchange during the five-trading day period prior to the date
of the grant.
How is performance
measured?
The vesting of performance rights to 30 June 2020 is subject to vesting conditions related to achievement
of total shareholder returns (TSR) and period of service. TSR performance is measured against the TSR of
a benchmark peer group. From 1 July 2020, future performance right grants will also include a compounding
annual growth rate vesting condition.
The following companies have been identified by Ramelius to comprise the peer group:
Company
ASX Code
Company
ASX Code
Saracen Mineral Holdings Limited
Regis Resources Limited
Silver Lake Resources Limited
Westgold Resources Limited
Northern Star Resources Limited
Resolute Mining Limited
Gold Road Resources Limited
Dacian Gold Limited
St Barbara Limited
SAR
RRL
SLR
WGX
NST
RSG
GOR
DCN
SBM
Pantoro Limited
Evolution Mining Limited
IGO Limited #
Perseus Mining Limited #
De Grey Mining Limited #
Bellevue Gold Limited #
Red 5 Limited #
Capricorn Metals Limited #
Aurelia Metals Limited #
PNR
EVN
IGO
PRU
DEG
BGL
RED
CMM
AMI
# Companies added to the peer group on 23 July 2020 but not applied retrospectively.
The NRC may recommend to the Board to either include or exclude gold mining organisations available on this
list to reflect changes in the industry.
The proportion of executive rights that vest is dependent on how the Ramelius TSR compares to the peer
group as follows:
Relative TSR Over the Vesting and
Measurement Period
Below the 50th percentile
At the 50th percentile
Between the 50th and 75th percentile
At and above the 75th percentile
Proportion of Performance Rights Vested
0%
50%
Pro-rata between 50% and 100%
100%
Once vested, rights may be exercised within seven years of the vesting date.
The vesting and measurement period for performance rights granted in the 2017 financial year have been set
over three years with vesting and measurement for each third of the granted rights occurring at the end of each
year during the three-year period.
For performance rights granted after 30 June 2017 the performance rights vest three years after the grant date.
Any performance rights that do not vest will lapse after testing. There is no re-testing of performance rights.
When is performance
measured?
What happens if an
executive leaves?
Where an executive ceases to be an employee of the group, any unvested performance rights will lapse on the
date of cessation of employment, except in limited circumstances that are approved by the Board on a case by
case basis.
73
Annual Report 2020 DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (CONTINUED)
Based on the above assessment the performance rights issued, vested, and lapsed in the 2020 financial year (for the 2019 financial year
performance) are detailed in the following table:
Name
Mark Zeptner 2
Tim Manners
Duncan Coutts
Kevin Seymour
Richard Jones
Position
Managing Director / Chief Executive Officer
Chief Financial Officer
Chief Operating Officer
General Manger – Exploration
Manager Legal / Company Secretary
Issued 1
967,025
212,382
247,294
157,398
160,014
Performance
rights
measured for
vesting
-
-
117,994
87,652
-
All performance rights
1 Performance rights issued during the financial year will be measured for vesting on 1 July 2022.
2 Performance rights issued during the financial year will be measured for vesting on 1 July 2020 (322,342) and 1 July 2022 (644,683).
3,684,003
770,369
Percentage
vested %
Number
vested
0%
0%
100%
100%
0%
-
-
117,994
87,652
-
100%
770,369
Employee Share Acquisition Plan
The Employee Share Acquisition Plan enables the Board to offer eligible employees ordinary fully paid shares in Ramelius as a long-term incentive,
in accordance with the terms of the plan. Shares may be offered at no consideration unless the Board determines that market value or some other
value is appropriate. No such shares were offered during the 2020 financial year.
Other long-term incentives
The Board may at its discretion provide share rights/options as a long-term retention incentive to employees.
(e) Link between remuneration and performance
The following table shows key performance indicators for the group over the last five years:
Net profit after tax
Dividend
Share price 30 June
Basic earnings per share
Diluted earnings per share
Unit
$’000
$’000
$
cents
cents
2020
113,415
6,579
1.99
16.43
16.13
2019
21,832
-
0.73
3.74
3.67
2018
30,760
-
0.58
5.84
5.75
2017
17,765
-
0.45
3.39
3.36
2016
27,540
-
0.44
5.82
5.81
The total remuneration mix for the Managing Director / Chief Executive Officer and other Executives is illustrated in the following graph. The link
between performance and remuneration is discussed within this remuneration report.
2020 Total remuneration mix
Managing
Director/CEO
Other
executives
74
44%
17%
31%
7%
55%
20%
20%
5%
0
20%
40%
60%
80%
100%
TFR
STI
LTI
STI forgone
Ramelius Resources DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (CONTINUED)
(f) Contractual arrangements for executive KMP
Remuneration and other terms of employment for executives are formalised in service agreements. The service agreements specify the
components of remuneration, benefits and notice periods. Participation in short-term and long-term incentives are at the discretion of the Board.
Other major provisions of the agreements relating to remuneration are set out below. Contracts with executives may be terminated early by either
party as detailed below:
Name and Position
Term of Agreement
Base Salary
incl. Super 1
Company /
Employee Notice
Period
Termination
Benefit 2
$650,000
Mark Zeptner
Managing Director / Chief Executive Officer
Tim Manners
Chief Financial Officer
Duncan Coutts
Chief Operating Officer
Kevin Seymour
GM – Exploration
Richard Jones
Manager Legal / Company Secretary
1 Base salaries quoted are as at 30 June 2020, they are reviewed annually by the Nomination and Remuneration Committee.
2 Termination benefits are payable on early termination by the company, other than for gross misconduct, unless otherwise indicated. In certain circumstances
the termination benefit may be 12 months base salary.
On-going commencing
1 July 2015
On-going commencing
31 July 2017
On-going commencing
12 February 2016
On-going commencing
1 July 2009
On-going commencing
26 October 2018
3 / 3 months
3 / 3 months
6 / 3 months
6 / 3 months
6 / 3 months
$401,500
$467,500
$302,500
$297,554
6 months’ base salary
6 months’ base salary
3 months’ base salary
3 months’ base salary
6 months’ base salary
(g) Non-executive director arrangements
Non-executive director fees are determined using the following guidelines. Fees are:
• Determined by the nature of the role, responsibility and time commitment necessary to perform required duties.
• Not performance or incentive based but are fixed amounts.
• Determined by the desire to attract a group of individuals with pertinent knowledge and experience.
In accordance with the Company’s Constitution, the total amount of remuneration of Non-Executive Directors is within the aggregate limit of
$750,000 per annum as approved by shareholders at the 2019 Annual General Meeting.
Non-executive directors may apportion any amount up to this maximum level amongst the non-executive directors as determined by the Board.
Remuneration consists of non-executive director fees, committee fees and superannuation contributions.
Non-executive directors are also entitled to be paid reasonable travelling, accommodation and other expenses incurred in performing their duties
as directors. Non-executive directors do not participate in any performance-based pay including schemes designed for the remuneration of an
executives, share rights or bonus payments and are not provided with retirement benefits other than salary sacrifice and superannuation.
All non-executive directors enter into a service agreement with the company in the form of a letter of appointment. The letter summarises the
Board policies and terms, including remuneration, relevant to the office of director. Details of remuneration fees paid to non-executive directors are
set out below:
Non-executive directors
Kevin Lines
Michael Bohm
David Southam
Natalia Streltsova1
Total
1 Natalia Streltsova was appointed as a director on 1 October 2019.
Year
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
Director fees
Superannuation
Total remuneration
176,136
173,269
110,000
95,304
110,000
97,231
78,750
-
474,886
365,804
17,614
17,327
11,000
9,530
11,000
9,723
7,875
-
47,489
36,580
193,750
190,596
121,000
104,834
121,000
106,954
86,625
-
522,375
402,384
75
Annual Report 2020
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (CONTINUED)
(h) Details of KMP remuneration
The following table shows details of the remuneration expense recognised for the group’s executive KMP for the current and previous financial year
measured in accordance with the requirements of the accounting standards.
FIXED REMUNERATION
VARIABLE REMUNERATION
Cash Salary1
Term.
Payments
Non-
Monetary
Benefits 1
Annual and
Long Service
Leave 2
Super-
annuation
STI 1, 5
LTI Rights 3
Total
Perform.
Related
-
-
-
-
6,518
5,343
6,518
5,343
632,500
521,666
Executive Director
Mark Zeptner – Managing Director / Chief Executive Officer
2020
2019
Executives
Tim Manners – Chief Financial Officer
383,919
2020
2019
357,868
Duncan Coutts – Chief Operating Officer
446,665
2020
2019
387,499
Kevin Seymour – General Manager – Exploration
2020
2019
Richard Jones – Manager Legal / Company Secretary
281,667
2020
2019
187,500
Domenico Francese - Company Secretary 4
2020
2019
Total
2020
2019
2,021,449
1,846,079
276,698
266,720
-
124,826
-
299,583
-
299,583
32,590
25,112
6,518
5,343
6,518
3,740
6,518
5,343
-
-
-
-
-
-
-
-
(41,877)
85,087
20,833
25,000
254,100
250,470
462,003
111,466
1,334,077
999,032
37,367
(218)
33,853
15,076
(6,922)
12,143
22,997
17,456
-
(44,146)
45,418
85,398
17,581
20,531
20,830
25,000
20,856
25,000
20,833
18,750
-
21,888
165,000
129,773
165,000
142,932
115,500
103,818
93,500
-
-
94,050
161,251
46,378
186,550
58,667
128,122
42,699
76,122
8,736
-
202
771,636
559,675
859,416
634,517
540,772
455,723
501,637
236,182
-
496,403
100,933
136,169
793,100
721,043
1,014,048
268,148
4,007,538
3,381,532
53.7%
36.2%
42.3%
31.5%
40.9%
31.8%
45.1%
32.2%
33.8%
3.7%
-
19.0%
45.1%
29.3%
1. Short-term benefits as per Corporations Regulation 2M.3.03(1) Item 6.
2. Other long-term benefits as per Corporations Regulation 2M.3.03 (1) Item 8. The amounts disclosed in this column represent the movements in the associated provisions.
They may be negative where a KMP has taken more leave than accrued during the year.
3. Rights and options relate to rights and options over ordinary shares issued to key management personnel. The fair value of rights and options granted shown above is non-
cash and was determined in accordance with applicable accounting standards and represents the fair value calculated at the time rights and options were granted and not
when shares were issued.
4. In addition to the amounts above Domenico Francese was paid $329,661 in 2019 for annual and long service leave entitlements which had been accrued but not paid during
his employment.
5. Refer to section (d) of this remuneration report for further information on the short-term incentives paid.
76
Ramelius Resources DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (CONTINUED)
(i) Other statutory information
(i) Terms and conditions of the share-based payment arrangements
Performance rights
The terms and conditions of each grant of performance rights affecting remuneration in the current or future reporting period are as follows:
Grant Date
1 July 2017
31 July 2017
3 October 2017
5 September 2018
29 November 2018
9 October 2019
29 November 2019
29 November 2019
29 November 2019
Vesting and
Exercise Date
1 July 2020
1 July 2020
1 July 2020
1 July 2021
1 July 2021
1 July 2022
1 July 2020
1 July 2022
1 July 2022
Expiry
Date
1 July 2027
1 July 2027
1 July 2027
1 July 2028
1 July 2028
1 July 2029
1 July 2027
1 July 2029
1 July 2029
Exercise
Price
Value Per
Performance Right
at Grant Date
Vested
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$nil
$0.33
$0.29
$0.27
$0.39
$0.27
$1.22
$0.86
$0.86
$0.65
0%
0%
0%
0%
0%
0%
0%
0%
0%
Rights to deferred shares under the Performance Rights Plan are assessed against vesting criteria (and vested accordingly) in July each year. Generally,
performance rights granted vest three years from the grant date. On vesting, each right must be exercised within seven years of the vesting date.
The performance rights carry no dividend or voting rights. If an employee ceases employment before the performance rights vest, the rights will be
forfeited, except in limited circumstances that are approved by the Board on a case-by-case basis.
(ii) Reconciliation of options, performance rights, and ordinary shares held by KMP
Options
The table below shows a reconciliation of options held by each KMP from the beginning to the end of the 2020 financial year. All vested options
were exercisable.
Name and grant dates
Mark Zeptner
26 November 2015
Balance at
start of year
Number
Vested
Balance at end of year
Number
%
Exercised
Vested
Unvested
1,500,000
1,500,000
100
(1,500,000)
-
-
The amounts paid per ordinary share on the exercise of options at the date of exercise were as follows:
Exercise
date
9 June 2020
Amounts paid
per share
$0.20
No amounts are unpaid on any shares issued on the exercise of options.
77
Annual Report 2020
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (CONTINUED)
Performance rights
The table below shows a reconciliation of performance rights held by each KMP from the beginning to the end of the 2020 financial year. All vested
performance rights were exercisable.
Name
Balance at
start of year
Granted
during year
Vested
Balance at
end of year
Value
to vest1
Grant year
Number
Number
%
Exercised
Vested
Unvested
$
Mark Zeptner
2020
2019
2017
Tim Manners
2020
2019
2018
Duncan Coutts
2020
2019
2018
2017
Kevin Seymour
2020
2019
2018
20172
Richard Jones
2020
2019
-
568,956
500,000
-
260,966
317,778
-
284,483
342,222
334,324
-
201,186
254,222
248,355
-
189,655
967,025
-
-
212,382
-
-
247,294
-
-
-
157,398
-
-
-
160,014
-
-
-
-
-
-
-
-
-
-
117,994
-
-
-
87,652
-
-
-
-
-
-
-
-
-
-
-
100
-
-
-
100
-
-
-
-
-
-
-
-
-
-
-
(334,324)
-
-
-
(248,355)
-
-
-
-
500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
967,025
568,956
-
212,382
260,966
317,778
247,294
284,483
342,222
-
157,398
201,186
254,222
-
160,014
189,655
393,797
59,906
-
188,441
36,560
-
219,417
39,560
-
-
139,655
27,977
-
-
141,976
19,969
1. The maximum value of the performance rights yet to vest has been determined as the amount of the grant date fair value of the rights that is yet to be expensed.
2. The balance at the start of the year includes both vested and unvested performance rights, all unvested rights at the beginning of the financial year vested during the
financial year.
Shareholdings
The table below shows a reconciliation of shareholdings held by each KMP from the beginning to the end of the 2020 financial year.
Name
Mark Zeptner
Kevin Lines
Michael Bohm
Kevin Seymour1
Duncan Coutts1
Balance at
start of year
3,012,500
1,000,000
1,237,500
194,860
-
Received during
year on exercise
of options
Received during
year on exercising
of performance
rights
1,500,000
-
-
-
-
-
-
-
248,355
334,324
Sold
during year
Balance at
end of year
-
-
(600,000)
(308,000)
(334,324)
4,512,500
1,000,000
637,500
135,215
-
1. The share price on the date of exercise was $1.31.
All shareholdings noted above are held either directly by the KMP or their associate.
78
Ramelius Resources DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (CONTINUED)
Loans to key management personnel
There were no loans made to key management personnel or their personally related parties during the current or prior financial year.
Other transactions with key management personnel
There were no other transactions with key management personnel.
Voting and comments made at the company’s 2019 Annual General Meeting
Of the total valid available votes lodged, Ramelius received 98% of ‘FOR’ votes on its remuneration report for the 2019 financial year.
The company did not receive any specific feedback at the AGM on its remuneration practices.
Share trading policy
The trading of shares is subject to, and conditional upon, compliance with the company’s employee Share Trading Policy. The policy is enforced
through a system that includes a requirement that executives confirm compliance with the policy and provide confirmation of dealings in Ramelius
securities. The ability for an executive to deal with an option or a right is restricted by the terms of issue and the plan rules which do not allow
dealings in any unvested security. The Share Trading Policy specifically prohibits an executive from entering into transactions that limit the economic
risk of participating in unvested entitlements such as equity-based remuneration schemes. The Share Trading Policy can be viewed on the
Company’s website.
Remuneration report ends.
SHARES UNDER OPTION
(a) Unissued ordinary shares
No unissued ordinary shares of Ramelius Resources Limited are under option at the date of this report.
(b) Shares issued on the exercise of options
The following ordinary shares of Ramelius were issued during the year ended 30 June 2020 as a result of the exercise of options. No amounts are
unpaid on any of the shares.
Date options granted
Exercise price
of options
Number of shares
issued
26 November 2015
$0.20
1,500,000
1,500,000
INSURANCE OF OFFICERS AND INDEMNITIES
Indemnification
Ramelius is required to indemnify its Directors and Officers against any liabilities incurred by the Directors and Officers that may arise from their
position as Directors and Officers of Ramelius and its controlled entities. No costs were incurred during the year pursuant to this indemnity.
Ramelius has entered into deeds of indemnity with each Director whereby, to the extent permitted by the Corporations Act 2001, Ramelius
agreed to indemnify each Director against all loss and liability incurred as an officer of the Company, including all liability in defending any
relevant proceedings.
Insurance premiums
Since the end of the previous year Ramelius has paid insurance premiums in respect of Directors’ and Officers’ liability and legal expenses insurance
contracts. The terms of the policies prohibit disclosure of details of the amount of the insurance cover, the nature thereof and the premium paid.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of Ramelius or to
intervene in any proceedings to which Ramelius is a party, for the purpose of taking responsibility on behalf of Ramelius for all or part of those
proceedings. There were no such proceedings brought or interventions on behalf of Ramelius with leave from the Court under section 237 of
the Corporations Act 2001.
79
Annual Report 2020 DIRECTORS’ REPORT (continued)
NON-AUDIT SERVICES
The company may decide to engage the auditor (Deloitte Touche Tohmatsu) on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the company and/or the group are important. Details of the amounts paid or payable to the auditor for
audit and non-audit services provided during the year are set out below.
The Board of Directors has considered the position and, in accordance with advice received from the Audit and Risk Committee, is satisfied that
the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence
requirements of the Corporations Act 2001 for the following reasons:
-
-
All non-audit services have been reviewed by the Audit and Risk Committee to ensure they do not impact the impartiality and objectivity of
the auditor;
None of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional
Accountants.
During the year the following fees were paid or payable for non-audit services provided by the auditor of the parent entity, its related practices and
non-related audit firms:
Other assurance and agreed upon procedures under other legislation or contractual arrangements
Other services:
Other
Total
2020
$
-
-
-
2019
$
6,250
13,200
19,450
AUDITOR INDEPENDENCE
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 81.
ROUNDING OF AMOUNTS
The company is of the kind referred to in ASIC Legislative Instrument 2016/191 relating to the ‘rounding off’ of amounts in the Directors’ report.
Amounts in the Directors’ report have been rounded off in accordance with the instrument to the nearest thousand dollars, or in certain cases, to
the nearest dollar.
This report is made in accordance with a resolution of Directors.
Kevin James Lines
Chairman
Perth
24 August 2020
80
Ramelius Resources
DIRECTORS’ REPORT (continued)
INDEPENDENT AUDITOR’S DECLARATION
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
The Directors
Ramelius Resources Limited
Level 1, 130 Royal Street
East Perth, WA 6892
24 August 2020
Dear Directors
Auditor’s Independence Declaration to Ramelius Resources Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Ramelius Resources Limited.
As lead audit partner for the audit of the financial report of Ramelius Resources Limited for
the year ended 30 June 2020, I declare that to the best of my knowledge and belief, there
have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation
to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
David Newman
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte Network.
81
Annual Report 2020
82
Ramelius Resources FINANCIAL
REPORT
Income statement and statement of
comprehensive income
Balance sheet
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors’ declaration
Independent auditor’s report to the members
84
85
86
87
89
137
138
83
Annual Report 2020 INCOME STATEMENT
For the year ended 30 June 2020
Revenue
Cost of production
Gross profit
Other expenses
Other income
Interest income
Finance costs
Profit before income tax
Income tax expense
Profit for the year from continuing operations
Earnings per share
Basic earnings per share
Diluted earnings per share
Note
1(a)
2(a)
2(b)
1(b)
2(c)
3
28
28
2020
$’000
460,574
(289,358)
171,216
(20,050)
1,346
998
(4,025)
149,485
(36,070)
113,415
Cents
16.43
16.13
2019
$’000
352,770
(309,161)
43,609
(15,016)
2,125
1,886
(2,193)
30,411
(8,579)
21,832
Cents
3.74
3.67
STATEMENT OF
COMPREHENSIVE INCOME
For the year ended 30 June 2020
Profit for the year
Other comprehensive income, net of tax
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
Items that may not be reclassified to profit or loss:
Change in fair value of financial assets
Other comprehensive income for the year, net of tax
Note
17
17
2020
$’000
113,415
(18)
672
654
2019
$’000
21,832
(69)
(50)
(119)
Total comprehensive income for the year
114,069
21,713
84
Ramelius Resources BALANCE SHEET
As at 30 June 2020
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Total current assets
Non-current assets
Other assets
Financial assets at FVOCI
Property, plant, and equipment
Development assets
Exploration and evaluation expenditure
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Contingent consideration
Current tax liabilities
Provisions
Current liabilities
Non-current liabilities
Lease liabilities
Contingent consideration
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Retained earnings
Total equity
Note
4(a)
5
6
7
7
8
9
10
11
12
13
14
3
15
13
14
3
15
16
17
2020
$’000
165,670
3,234
97,553
4,475
270,932
503
624
78,368
208,268
196,247
484,010
754,942
82,302
23,475
16,643
6,261
21,272
9,219
159,172
13,846
6,923
21,061
38,720
80,550
239,722
515,220
370,781
(34,707)
179,146
515,220
2019
$’000
95,815
6,774
41,067
8,629
152,285
1,488
101
43,823
99,430
99,442
244,284
396,569
44,926
-
-
-
-
6,852
51,778
-
12,121
7,741
45,987
65,849
117,627
278,942
214,218
(7,674)
72,398
278,942
85
Annual Report 2020 STATEMENT OF
CHANGES IN EQUITY
For the year ended 30 June 2020
Balance at 30 June 2018
Profit for the year
Other comprehensive loss
Total comprehensive (loss) / income
Transactions with owners in their capacity as owners:
Shares issued for acquisition of Explaurum Limited
(see notes 17 & 20)
Shares issued on exercise of options
Share-based payments
Balance at 30 June 2019
Balance at 1 July 2019
Adoption of AASB16 Leases (net of tax)
At 1 July 2019 (re stated)
Profit for the year
Other comprehensive gain
Total comprehensive (loss) / income
Transactions with owners in their capacity as owners:
Shares issued for acquisition of Spectrum Metals Limited
(see notes 17 & 20)
Payment of dividends
Shares issued on exercise of options
Share-based payments
Balance at 30 June 2020
Share
capital
$’000
149,568
-
-
-
64,232
300
118
214,218
214,218
-
214,218
-
-
-
155,523
-
300
740
370,781
Share-based
payment
reserve
$’000
Other
reserves
$’000
Retained
profits
$’000
Total
equity
$’000
1,545
339
50,520
201,972
-
-
-
-
-
487
2,032
2,032
-
2,032
-
-
-
-
-
-
1,390
3,422
-
(119)
(119)
21,832
-
21,832
21,832
(119)
21,713
-
54,306
(9,926)
-
-
(9,706)
(9,706)
-
(9,706)
-
46
72,398
72,398
(696)
71,702
-
46
46
113,415
608
114,023
300
651
278,942
278,942
(696)
278,246
113,415
654
114,069
(28,469)
-
-
-
(38,129)
-
127,054
(6,579)
-
-
179,146
(6,579)
300
2,130
515,220
Share-based payment reserve
Share-based payments reserve records items recognised as expenses on valuation of employees share options and rights.
Other reserves - financial assets at FVOCI
The group has elected to recognise changes in the fair value of certain investments in equity securities in OCI. These changes are accumulated
within the FVOCI reserve within equity. The group transfers amounts from this reserve to retained earnings when the relevant equity securities are
derecognised.
Other reserves - Non-Controlling Interest (NCI) acquisition reserve
The NCI acquisition reserve represents the incremental increase in the Ramelius share price on the acquisition of non-controlling interest post the
date control was obtained. This reserve relates to the acquisition of Spectrum Metals Limited and Explaurum Limited.
Foreign currency translation reserve
Foreign currency translation reserve comprises all foreign exchange difference arising from the translation of the financial statements of foreign
operations where their functional currency is different to the presentation currency of the reporting entity.
86
Ramelius Resources STATEMENT OF
CASH FLOWS
For the year ended 30 June 2020
Cash flows from operating activities
Receipts from operations
Payments to suppliers and employees
Interest received
Income tax (paid) / received
Net cash provided by operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for development assets
Proceeds from sale of property, plant and equipment
Proceeds from the sale of subsidiary
Proceeds from the sale of mining tenements
Payments for the acquisition of subsidiary, net of cash acquired
Loan to Explaurum Limited
Payments for financial assets
Payments for mining tenements and exploration
Payments for site rehabilitation
Net cash used in investing activities
Cash flows from financing activities
Proceeds from the issue of shares
Proceeds from borrowings
Repayment of borrowings
Borrowing costs and interest paid
Principal elements of lease payments
Return of / (payments for) secured deposits
Dividends paid
Net cash provided by / (used in) financing activities
Net increase in cash and cash equivalents
Cash at the beginning of the financial year
Note
4(b)
20
15
16
12
12
13
2020
$’000
466,333
(230,024)
930
(1,208)
236,031
(16,207)
(105,037)
107
-
950
(30,692)
-
(30)
(18,356)
(1,540)
(170,805)
300
32,500
(8,125)
(1,860)
(15,737)
4,130
(6,579)
4,629
69,855
95,815
Cash and cash equivalents at the end of the financial year
4(a)
165,670
2019
$’000
348,382
(213,321)
1,843
79
136,983
(7,995)
(58,233)
763
1,000
-
(21,621)
(3,700)
(25)
(18,962)
(209)
(108,982)
300
-
-
(14)
-
(681)
-
(395)
27,606
68,209
95,815
87
Annual Report 2020 88
Ramelius Resources CONTENTS OF THE
NOTES TO THE FINANCIAL
STATEMENTS
About this report
Key numbers
Segment information
Note 1:
Revenue
Note 2:
Expenses
Note 3:
Income tax expense
Note 4: Cash and cash equivalents
Note 5: Trade and other receivables
Note 6:
Inventories
Note 7: Other assets
Note 8:
Property, plant and equipment
Note 9: Development assets
Note 10: Exploration and evaluation assets
Note 11: Trade and other payables
Note 12: Borrowings
Note 13: Lease liabilities
Note 14: Contingent consideration
Note 15: Provisions
Note 16
Share capital
Note 17: Reserves
Risk
90
92
92
94
95
96
99
100
101
102
102
105
107
108
109
110
115
116
118
119
119
Note 18: Financial instruments and financial risk management 119
Note 19: Capital risk management
Group structure
Note 20: Asset acquisitions
Note 21:
Interests in other entities
Unrecognised items
Note 22: Contingent liabilities
Note 23: Commitments
Other information
Note 24: Events occurring after the reporting period
Note 25: Related party transactions
Note 26: Share based payments
Note 27 Remuneration of auditors
Note 28: Earnings per share
Note 29: Assets pledged as security
Note 30: Deed of cross guarantee
Note 31: Parent entity information
Note 32: Accounting policies
123
124
124
125
126
126
127
128
128
128
128
131
131
132
133
135
136
89
Annual Report 2020
NOTES TO THE
FINANCIAL STATEMENTS
About this report
Ramelius Resources Limited (referred to as ‘Ramelius’ or ‘company’) is a for-profit company limited by shares incorporated and domiciled in
Australia whose shares are publicly listed on the Australian Securities Exchange Limited (ASX). The nature of the operations and principal activities
of Ramelius and its controlled entities (referred to as ‘the group’) are described in the segment information.
The consolidated general purpose financial report of the group for the year ended 30 June 2020 was authorised for issue in accordance with a
resolution of the Directors on 24 August 2020. The Directors have the power to amend and reissue the financial report.
The financial report is a general purpose financial report which:
-
has been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standard Board
(AASB) and the Corporations Act 2001. The consolidated financial statements of the group also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
- has been prepared under the historical cost convention except for FVOCI financial assets, which have been measured at fair value.
-
-
-
has been presented in Australian dollars and rounded to the nearest $1,000 unless otherwise stated, in accordance with ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument 2016/191.
adopts all new and amended Accounting Standards and Interpretations issued by the AASB that are relevant to the group and effective for
reporting periods beginning on or before 1 July 2019. Refer to Note 32 for further details.
does not early adopt Accounting Standards and Interpretations that have been issued or amended but are not yet effective.
Refer to Note 32 for further details.
KEY JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
In the process of applying the group’s accounting policies, management has made a number of judgements and applied estimates of future events.
Judgements and estimates which are material to the financial report are found in the following notes.
Page
98
102-108
102-106
106
106
106
108
114
115
117
117
Note
Note 3
Note 8, 9 & 10
Note 8 & 9
Note 9
Note 9
Note 9
Note 10
Note 13
Note 14
Note 15
Note 15
Recovery of deferred tax assets
Impairment of assets
Depreciation and amortisation
Production stripping
Deferred mining expenditure
Ore reserves
Exploration and evaluation expenditure
Leases
Contingent consideration
Provision for restoration and rehabilitation
Provision for long service leave
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements comprise the financial statements of the parent entity, Ramelius Resources Limited, and its controlled entities.
A list of controlled entities is contained in Note 21 to the consolidated financial statements. All controlled entities have a 30 June financial year end.
In preparing the consolidated financial statements, all inter-company balances and transactions, income and expenses and profits and losses resulting
from intra-group transactions have been eliminated.
Subsidiaries are consolidated from the date on which control is obtained to the date on which control is disposed. The acquisition of subsidiaries is
accounted for using the acquisition method of accounting.
FOREIGN CURRENCY
The functional currencies of overseas subsidiaries are listed in Note 21. As at the reporting date, the assets and liabilities of overseas subsidiaries are
translated into Australian dollars at the rate of exchange ruling at the balance sheet date and the income statements are translated at the average
exchange rates for the year. The exchange differences arising on the translation are taken directly to a separate component of equity.
90
Ramelius Resources
NOTES TO THE
FINANCIAL STATEMENTS
FOREIGN CURRENCY (continued)
Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the balance sheet date.
Exchange differences arising from the application of these procedures are taken to the income statement, with the exception of differences on
foreign currency borrowings that provide a hedge against a net investment in a foreign entity, which are taken directly to equity until the disposal
of the net investment and are then recognised in the income statement. Tax charges and credits attributable to exchange differences on those
borrowings are also recognised in equity.
OTHER ACCOUNTING POLICIES
Significant and other accounting policies that summarise the measurement basis used and are relevant to an understanding of the financial
statements are provided throughout the notes to the financial statements.
THE NOTES TO THE FINANCIAL STATEMENTS
The notes include information which is required to understand the financial statements and is material and relevant to the operations, financial
position and performance of the group. Information is considered material and relevant if, for example:
-
-
-
-
the amount in question is significant because of its size or nature;
it is important for understanding the results of the group;
it helps to explain the impact of significant changes in the group’s business – for example acquisition and impairment write downs; or
it relates to an aspect of the group’s operations that is important to its future performance.
The notes are organised into the following sections:
-
-
-
-
-
Key Numbers: provides a breakdown of individual line items in the financial statements that the Directors consider most relevant and
summarises the accounting policies, judgements and estimates relevant to understanding these line items.
Risk: provides information about the capital management practices of the group and discusses the group’s exposure to various financial
risks and what the group does to manage these risks.
Group Structure: explains aspects of the group structure and how changes have affected the financial position and performance of
the group.
Unrecognised Items: provides information about items that are not recognised in the financial statements but could potentially have a
significant impact on the group’s financial position and performance.
Other Information: provides information on items which require disclosure to comply with Australian Accounting Standards and
other regulatory pronouncements. However, these are not considered critical in understanding the financial performance or position of the
group.
SIGNIFICANT ITEMS IN THE CURRENT REPORTING PERIOD
The financial position and performance of the group was particularly affected by the following events and transactions during the
reporting period:
•
The acquisition of Spectrum Metals Limited (Penny Gold Hill Project) which was completed in June 2020 (see Note 20) which
resulted in an increase in exploration and evaluation assets (Note 10).
For a detailed discussion about the group’s performance and financial position please refer to our operating and financial review on
pages 12 to 23 and 62 to 65.
91
Annual Report 2020
NOTES TO THE
FINANCIAL STATEMENTS
Key numbers
SEGMENT INFORMATION
(a) Description of segments and principal activities
Management has determined the operating segments based on internal reports about components of the group that are regularly reviewed
by the Chief Operating Decision Maker (CODM), being the Managing Director / Chief Executive Officer, to make strategic decisions. Reportable
operating segments are Mt Magnet, Edna May and Exploration. The group operates primarily in one business segment, namely the exploration,
development and production of minerals with a focus on gold. The CODM monitors performance in these areas separately. Unless stated
otherwise, all amounts reported to the CODM are determined in accordance with accounting policies that are consistent to those adopted
in the annual financial statements of the group. Operating segment performance details for financial years 2020 and 2019 are set out below.
(b) Segment results
2020 Segment results
Segment revenue
Cost of production
Amortisation and depreciation
Movement in inventory
Deferred mining costs
Gross margin
Impairment of exploration and evaluation assets
Segment margin
Interest income
Finance costs
Other expenses
Profit before income tax from continuing operations
Total segment assets
Total segment liabilities
2019 Segment results
Segment revenue
Cost of production
Amortisation and depreciation
Movement in inventory
Deferred mining costs
Gross margin
Impairment of exploration and evaluation assets
Segment margin
Interest income
Finance costs
Other expenses
Profit before income tax from continuing operations
Total segment assets
Total segment liabilities
92
Mt Magnet
$’000
324,322
(211,659)
(70,465)
38,444
53,756
134,398
-
134,398
Edna May
$’000
136,252
(117,877)
(32,620)
17,728
33,335
36,818
-
36,818
Exploration
$’000
Total
$’000
-
-
-
-
-
-
(6,336)
(6,336)
460,574
(329,536)
(103,085)
56,172
87,091
171,216
(6,336)
164,880
998
(4,025)
(12,368)
149,485
183,486
204,249
196,892
584,627
92,011
75,821
907
168,739
Mt Magnet
$’000
Edna May
$’000
Exploration
$’000
207,123
(176,895)
(67,920)
5,360
46,879
14,547
-
14,547
145,647
(85,537)
(13,383)
(23,034)
5,369
29,062
-
29,062
-
-
-
-
-
-
(2,800)
(2,800)
Total
$’000
352,770
(262,432)
(81,303)
(17,674)
52,248
43,609
(2,800)
40,809
1,886
(2,193)
(10,091)
30,411
115,975
74,594
100,021
290,590
55,676
48,163
1,626
105,465
Ramelius Resources NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
SEGMENT INFORMATION (continued)
(c) Segment gross margin reconciliation
Segment margin reconciles to profit before income tax from continuing operations for the year ended 30 June 2020 and 30 June 2019 as follows:
Segment margin
Other income
Interest income
Depreciation and amortisation
Employee benefit expense
Equity settled share-based payments
Exploration and evaluation costs
Change in fair value of Edna May contingent consideration
Impairment of debtors
(Loss) / gain on sale of property, plant and equipment
Gain on sale of tenements
Finance costs
Other expenses
Profit before income tax from continuing operations
(d) Other profit and loss disclosure
2020
Exploration and evaluation costs
Impairment of exploration and evaluation assets
Change in fair value of contingent consideration
Total other profit and loss disclosure
2019
Exploration and evaluation costs
Impairment of exploration and evaluation assets
Change in fair value of contingent consideration
Total other profit and loss disclosure
(e) Segment assets
Operating segment assets are reconciled to total assets as follows:
Segment assets
Unallocated assets:
Cash and cash equivalents
Other current assets
Other non-current assets
Financial assets at FVOCI
Property, plant and equipment
Total assets as per the balance sheet
2020
$’000
164,880
31
998
(428)
(6,737)
(2,130)
(438)
173
-
(113)
1,142
(4,025)
(3,868)
149,485
2019
$’000
40,809
116
1,886
(193)
(6,674)
(651)
(711)
2,009
(717)
-
-
(2,193)
(3,270)
30,411
Mt Magnet
$’000
Edna May
$’000
Exploration
$’000
-
-
-
-
-
-
173
173
(438)
(6,336)
-
(6,774)
Mt Magnet
$’000
Edna May
$’000
Exploration
$’000
-
-
-
-
-
-
2,009
2,009
(711)
(2,800)
-
(3,511)
Total
$’000
(438)
(6,336)
173
(6,601)
Total
$’000
(711)
(2,800)
2,009
(1,502)
2020
$’000
584,627
165,670
3,630
13
624
378
754,942
2019
$’000
290,590
95,815
8,629
1,016
101
418
396,569
93
Annual Report 2020 NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
SEGMENT INFORMATION (continued)
(f) Segment liabilities
Operating segment liabilities are reconciled to total liabilities as follows:
Segment liabilities
Unallocated liabilities:
Trade and other payables
Current tax liabilities
Current provisions
Current lease liabilities
Borrowings
Non-current provisions
Deferred tax liabilities
Total liabilities as per the balance sheet
2020
$’000
168,739
4,290
21,272
555
288
23,475
42
21,061
239,722
2019
$’000
105,465
3,980
-
423
-
-
18
7,741
117,627
(g) Major customers
Ramelius sells its gold production to either The Perth Mint or delivers it into forward gold contracts.
(h) Segments assets by geographical location
The total non-current assets other than financial instruments and deferred tax assets, broken down by the location of the assets, is shown in the
following table:
Australia
US
Total non-current assets other than financial instruments and deferred tax assets
NOTE 1: REVENUE
The group derives the following types of revenue:
(a) Revenue
Gold sales
Silver sales
Other revenue
Total revenue from continuing operations
(b) Other income
Change in fair value of Edna May contingent consideration
Gain on sale of tenements
Foreign exchange gains
Total other income from continuing operations
94
2020
$’000
482,883
-
482,883
2020
$’000
459,609
767
198
460,574
2020
$
173
1,142
31
1,346
Note
Note
14
2019
$’000
241,741
954
242,695
2019
$’000
350,981
808
981
352,770
2019
$
2,009
-
116
2,125
Ramelius Resources NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 1: REVENUE (continued)
(c) Recognising revenue from major business activities
Revenue (general)
Revenue is measured at the fair value of the consideration received or receivable. Revenue from sale of goods or rendering of a service is
recognised upon delivery of the goods or service to customers as this corresponds to the transfer of control of the goods and the cessation
of all involvement with those goods. All revenue is stated net of goods and services tax (GST).
Gold bullion and silver sales
Revenue from gold bullion and silver sales is brought to account when control over the inventory has transferred to the buyer and selling prices are
known or can be reasonably estimated.
NOTE 2: EXPENSES
Profit before tax includes the following expenses whose disclosure is relevant in explaining the performance of the group:
(a) Cost of production
Mining and milling production costs
Employee benefits expense
Royalties
Amortisation and depreciation
Inventory movements
Total cost of production from continuing operations
(b) Other expenses
Employee benefit expense
Equity settled share-based payments
Other expenses
Amortisation and depreciation
Exploration and evaluation costs
Impairment of exploration and evaluation assets
Impairment of receivable
Loss on sale of property, plant and equipment
Total other expenses from continuing operations
(c) Finance costs
Provisions: unwinding of discount
Contingent consideration: unwinding of discount
Interest on leases
Interest and finance charges
Total finance costs from continuing operations
Note
26
10
15
14
13
2020
$’000
182,020
38,388
22,036
103,085
(56,171)
289,358
6,737
2,130
3,868
428
438
6,336
-
113
20,050
639
1,236
1,009
1,141
4,025
2019
$’000
157,575
36,247
16,362
81,303
17,674
309,161
6,674
651
3,270
193
711
2,800
717
-
15,016
941
1,238
-
14
2,193
(d) Recognising expenses from major business activities
Amortisation and depreciation
Refer to Notes 8 and 9 for details on depreciation and amortisation.
Impairment
Impairment expenses are recognised to the extent that the carrying amounts of assets exceed their recoverable amounts. Refer to Notes 8, 9 and
10 for further details on impairment.
Employee benefits expense
The group’s accounting policy for liabilities associated with employee benefits is set out in Note 15. The policy relating to share-based payments is
set out in Note 26.
95
Annual Report 2020 NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 3: INCOME TAX EXPENSE
(a) The components of tax expense comprise:
Current tax
Deferred tax
Income tax expense from continuing operations
(b) Recognition of income tax expense to prima facia tax payable:
Accounting profit before tax
Income tax expense calculated at 30%
Tax effects of amounts which are not deductible / (taxable) in calculating taxable income:
- Share-based payments
- Other non-allowable items
- Adjustments for prior periods
- Research and development tax credit
- Tax losses utilised in current year
- Tax losses brought to account
Income tax expense
2020
$’000
22,480
13,590
36,070
2020
$’000
149,485
44,846
639
671
-
-
(2,996)
(7,090)
36,070
2019
$’000
(79)
8,658
8,579
2019
$’000
30,411
9,123
195
11
(671)
(79)
-
-
8,579
24%
28%
Applicable effective tax rate
(c) Deferred tax movement:
30 June 2020
Deferred tax liability (DTL)
Exploration and evaluation
Development
Inventory – consumables
Total DTL
Deferred tax asset (DTA)
Inventory – deferred mining costs
Inventory – stock
Property, plant and equipment
Provisions
Leases (see note 13)
Financial assets at FVOCI
Tax losses
Tax losses brought to account
Other
Total DTA
Net deferred tax liability #
1 July 2019
$’000
Adoption
of AASB 16
$’000
Transfers
$’000
Other
comp.
income
$’000
Income
statement
$’000
30 June 2020
$’000
8,726
22,234
319
31,279
2,236
-
1,944
15,554
-
-
2,115
-
1,689
23,538
(7,741)
-
-
-
-
-
-
-
-
298
-
-
-
-
-
-
3,021
(3,021)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(28)
-
-
-
(28)
10,519
6,945
(5)
17,459
(1,192)
1,469
(128)
(971)
(61)
-
(2,115)
7,090
(223)
3,869
(13,590)
22,266
26,158
314
48,738
1,044
1,469
1,816
14,583
237
(28)
-
7,090
1,466
27,677
(21,061)
# Deferred tax assets and liabilities have been offset for presentation on the balance sheet pursuant to set off provisions.
96
Ramelius Resources NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 3: INCOME TAX EXPENSE (continued)
(c) Deferred tax movement (continued):
30 June 2019
Deferred tax liability (DTL)
Exploration and evaluation
Development
Property, plant and equipment
Inventory – consumables
Total DTL
Deferred tax asset (DTA)
Inventory – deferred mining costs
Property, plant and equipment
Provisions
Tax losses
Other
Total DTA
Net deferred tax asset / (liability) #
Balance at
1 July 2018
$’000
Charged /
(credited) to
income
$’000
Balance at
30 June 2019
$’000
5,644
19,545
499
342
26,030
2,236
933
14,886
8,296
596
26,947
917
3,082
2,689
(499)
(23)
5,249
-
1,011
668
(6,181)
1,093
(3,409)
8,726
22,234
-
319
31,279
2,236
1,944
15,554
2,115
1,689
23,538
(7,741)
# Deferred tax assets and liabilities have been offset for presentation on the balance sheet pursuant to set off provisions.
(d) Tax losses:
Unused tax losses:
- for which a deferred asset has been recognised
- for which no deferred asset has been recognised
Total potential unused tax losses
2020
2019
Gross
Net (30%)
Gross
Net (30%)
23,632
25,402
49,034
7,090
7,620
14,710
7,050
37,923
44,973
2,115
11,377
13,492
Unused tax losses for which no deferred asset has been recognised
Spectrum Metals Limited, Zebra Minerals Pty Ltd and Red Dirt Mining Pty Ltd (‘the Spectrum tax consolidated group’) joined the Ramelius tax
consolidated group on 23 June 2020. When a company enters an existing tax consolidated group, the tax losses of that company at the date
it enters the tax consolidated group may be transferred to the existing tax group and utilised against future taxable income, subject to various
provisions in the relevant tax legislation.
As at 30 June 2020 the ability of the Ramelius consolidated tax group to access and utilise the carried forward tax losses from the Spectrum tax
consolidated group is being assessed and as such no deferred tax asset has been recognised in relation to these carried forward tax losses. As at 30
June 2019 the Spectrum tax consolidated group had carried forward tax losses of $21,097,000 with a potential benefit of $6,329,000, with work
continuing on the tax loss for the ‘stub’ period (being the period from 1 July 2019 to 22 June 2020).
The balance of the unused tax losses for which no deferred tax asset has been recognised relates to capital losses.
97
Annual Report 2020 NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 3: INCOME TAX EXPENSE (continued)
(d) Tax losses (continued)
Unused tax losses for which a deferred asset has been recognised
During the year work was completed on the assessment of the ability of the Ramelius consolidated tax group to access and utilise the
carried forward tax losses of Explaurum Operations Pty Ltd. This work included obtaining advice from external tax advisors as part of the
availability assessment. As a result of this assessment the unused tax losses of Explaurum Operations Pty Limited were transferred into the existing
tax consolidated group. These losses were assessed as recoverable and as a result have been recognised. These losses can be utilised against
current and future taxable income, subject to various provisions in the relevant tax legislation. Unused tax losses transferred into the existing tax
consolidated group totalled $33,618,000 with a potential benefit $10,085,000.
A total of $20,272,000 of tax losses with a benefit of $6,081,000 (which includes $2,996,000 relating to historical Explaurum Operations Pty
Limited losses) were utilised during the current financial year with a balance of $23,632,000 unused tax losses with a potential benefit of $7,090,000
remaining as at 30 June 2020. A deferred tax asset has been recognised for these unused tax losses.
The Directors have assessed that it is probable that the group will generate sufficient taxable profits to utilise the losses recognised as a
deferred tax asset.
Key judgement, estimates and assumptions: Recovery of deferred tax assets
Judgement is required to determine whether deferred tax assets are recognised in the balance sheet. Deferred tax assets, including those
arising from unused tax losses, require management to assess the likelihood that the group will generate sufficient taxable earnings in the
future periods in order to recognise and utilise those deferred tax assets. Judgement is also required in respect of the expected manner
of recovery of the value of an asset or liability (which will then impact the quantum of the deferred tax assets or deferred tax liabilities
recognised) and the application of existing laws in each jurisdiction.
Estimates of future taxable income are based on forecast cash flows from operations and existing tax laws in each jurisdiction. These
assessments require the use of estimates and assumptions such as exchange rates, commodity prices, the timing of production profiles,
and operating performance over the life of the assets. To the extent that cash flows and taxable income differ significantly from estimates,
the ability of the group to realise the net deferred tax assets reported at the reporting date could be impacted.
Additionally, future changes in tax laws in the jurisdictions in which the group operates could limit the ability of the group to obtain tax
deductions and recover/utilise deferred tax assets in future periods.
(e) Recognition and measurement of income tax
Current income tax
Current income tax expense charged to the income statement is the tax payable on taxable income calculated using applicable income tax rates
that have been enacted, or substantially enacted by the reporting date. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretations. Current tax liabilities (assets) are therefore measured at the
amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred taxes
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax
losses.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed for accounting purposes, but
future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business
combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised, or the liability
is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the way management expects to
recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable
profits will be available against which the benefits of the deferred tax asset can be utilised. The amount of benefits brought to account or which
may be realised in the future is based on the assumption that no adverse change will occur in income tax legislation and the anticipation that
that the group will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility
imposed by the law.
98
Ramelius Resources NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 3: INCOME TAX EXPENSE (continued)
(e) Recognition and measurement of income tax (continued)
Tax consolidated group
Ramelius Resources Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under tax consolidation
legislation. Each entity in the group recognises its own current and deferred tax assets and liabilities. Such taxes are measured using the ‘stand-alone
taxpayer’ approach to allocation.
Current tax liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are immediately transferred to
the head entity.
The tax consolidated group has entered into a tax funding arrangement whereby each company in the group contributes to the income tax payable
by the group in proportion to their contribution to the group’s taxable income. Differences between the amounts of net tax assets and liabilities
derecognised and the net amounts recognised pursuant to the funding arrangement are recognised as either a contribution by, or distribution to
the head entity.
NOTE 4: CASH AND CASH EQUIVALENTS
(a) Cash and cash equivalents
Cash at bank and in hand
Deposits at call
Total cash and cash equivalents
(b) Reconciliation of net profit after tax to net cash flows from operations
Net profit
Non-cash items
- Share based payments
- Depreciation and amortisation
- Write off and impairment of exploration assets
- Discount unwind on provisions
- Discount unwind on deferred consideration
- Change in fair value of Edna May contingent consideration
- Net exchange differences
- Impairment of receivable
Items presented as investing or financing activities
- Gain on disposal of non-current assets
- Other finance costs
(Increase) / decrease in assets
- Prepayments
- Trade and other receivables
- Inventories
- Deferred tax assets
Increase / (decrease) in liabilities
- Trade and other payables
- Current tax payable
- Provisions
- Deferred tax liabilities
Net cash provided by operating activities
2020
$’000
125,670
40,000
165,670
113,415
2,130
103,513
6,336
639
1,236
(173)
(31)
-
(1,029)
2,150
918
3,725
(56,486)
(5,320)
24,347
21,272
721
18,668
236,031
2019
$’000
40,815
55,000
95,815
21,832
651
81,496
3,511
941
1,238
(2,009)
-
717
(765)
-
(690)
(3,337)
17,019
3,409
8,111
-
(404)
5,249
136,969
99
Annual Report 2020 NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 4: CASH AND CASH EQUIVALENTS (continued)
(c) Recognition and measurement
Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank, demand deposits held with banks, other short-term highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in values. For the purposes of the
Statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined below.
Risk exposure
The group’s exposure to interest rate risk is discussed in Note 18. Maximum exposure to credit risk at the end of the reporting period is the
carrying amount of each class of cash and cash equivalents disclosed above.
(d) Net cash reconciliation
This section sets out an analysis of net cash and the movements in the net cash for each of the financial years presented.
Net Cash
Cash and cash equivalents
Borrowings – bank loans repayable within one year
Borrowings – leases repayable within one year
Borrowings – leases repayable after one year
Net cash
Net cash at 30 June 2018
Cash flows
Balance at 30 June 2019
Balance at 1 July 2019
Adoption of AASB 16 Leases
At 1 July 2019 (re stated)
Cash flows
Lease additions (including interest)
Balance at 30 June 2020
2020
$’000
165,670
(24,375)
(16,643)
(13,846)
110,806
Borrowings
$’000
Leases
$’000
Sub-total
$’000
-
-
-
-
-
-
(24,375)
-
(24,375)
-
-
-
-
(21,256)
(21,256)
15,737
(24,970)
(30,489)
-
-
-
-
(21,256)
(21,256)
(8,638)
(24,970)
(54,864)
Cash
$’000
68,209
27,606
95,815
95,815
-
95,815
69,855
-
165,670
NOTE 5: TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Provision for impairment
Trade receivables
Other receivables
Total current trade and other receivables
100
2020
$’000
23
(8)
15
3,219
3,234
2019
$’000
95,815
-
-
-
95,815
Net Cash
$’000
68,209
27,606
95,815
95,815
(21,256)
74,559
61,217
(24,970)
110,806
2019
$’000
5,422
(8)
5,414
1,360
6,774
Ramelius Resources NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 6: INVENTORIES
Ore stockpiles
Gold in circuit
Gold bullion and dore
Gold nuggets
Consumables and supplies
Total inventories
2020
$’000
73,308
5,382
7,376
80
11,407
97,553
2019
$’000
22,313
2,107
5,475
80
11,092
41,067
(a) Inventory expense
Write down of inventories to net realisable value amounted to $4,802,000 (2019: $548,000 credit to income statement). These were recognised
as an expense during the year ended 30 June 2020 and included in the cost of production in the income statement. The write downs to the net
realisable value mainly related to stockpiles of Stellar ore which is of a low grade until which point the main ore body is accessed.
(b) Recognition and measurement
Inventories
Gold ore, gold in circuit and poured gold bars are physically measured, or estimated, and valued at the lower of cost and net realisable value.
Cost represents the weighted average cost and includes direct costs and an appropriate allocation of fixed and variable production overhead costs,
including depreciation and amortisation.
Consumables and stores are valued at the lower of cost and net realisable value. Costs of purchased inventory are determined after deducting any
applicable rebates and discounts. A periodic review is undertaken to establish the extent of any surplus or obsolete items and where necessary a
provision is made.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion of sale.
Gold ore represents stockpiled ore that has been mined or otherwise acquired and is available for further processing. If there is significant
uncertainty as to whether the stockpiled ore will be processed, it is expensed. Where future processing of ore can be predicted with
confidence (e.g. it exceeds the mine cut-off grade), it is valued at the lower of cost and net realisable value. If ore is not expected to be
processed within 12 months after reporting date, it is classified as non-current assets. Ramelius believes processing ore stockpiles may have
a future economic benefit to the group and accordingly ore is valued at lower of cost and net realisable value.
101
Annual Report 2020 NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 7: OTHER ASSETS
Current
Prepayments
Secured term deposits with financial institutions
Total other current assets
Non-current
Secured term deposits with financial institutions
Other security bonds and deposits
Total other non-current assets
2020
$’000
1,105
3,370
4,475
-
503
503
2019
$’000
2,129
6,500
8,629
1,000
488
1,488
(a) Other non-current assets
Other non-current assets comprise secured deposits with financial institutions for finance facilities as well as bonds and deposits with government
bodies with regards to the mining and exploration activities of the group.
NOTE 8: PROPERTY, PLANT AND EQUIPMENT
Land and
buildings
$’000
Plant and
equipment
$’000
Assets under
construction
$’000
Right-of-use
assets
$’000
8,651
(1,577)
7,074
-
7,074
7,074
-
692
(127)
177
(590)
7,226
9,411
(2,185)
7,226
107,852
(73,831)
34,021
-
34,021
34,021
365
7,193
(93)
3,533
(10,916)
34,103
118,781
(84,678)
34,103
2,728
-
2,728
-
2,728
2,728
-
8,322
-
(3,710)
-
7,340
7,340
-
7,340
-
-
-
20,262
20,262
20,262
-
23,961
-
-
(14,524)
29,699
44,223
(14,524)
29,699
Total
$’000
119,231
(75,408)
43,823
20,262
64,085
64,085
365
40,168
(220)
-
(26,030)
78,368
179,755
(101,387)
78,368
2020
As at 1 July 2019
Cost
Accumulated depreciation
Net book amount
Adoption of AASB 16 Leases
As at 1 July 2019 (restated)
Year ended 30 June 2020
Opening net book amount
Acquisition of subsidiary
Additions
Disposals
Transfers
Depreciation charge
Closing net book amount
As at 30 June 2020
Cost
Accumulated depreciation
Net book amount
102
Ramelius Resources NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 8: PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
2019
As at 1 July 2019
Cost
Accumulated depreciation
Net book amount
Year ended 30 June 2019
Opening net book amount
Additions on the acquisition of subsidiary
Transfers from mine development
Additions
Disposals
Transfers
Depreciation charge
Closing net book amount
As at 30 June 2019
Cost
Accumulated depreciation
Net book amount
Land and
buildings
$’000
Plant and
equipment
$’000
Assets under
construction
$’000
7,096
(802)
6,294
6,294
135
-
-
-
1,420
(775)
7,074
8,651
(1,577)
7,074
102,212
(59,297)
42,915
42,915
134
249
-
(6)
5,223
(14,494)
34,021
107,852
(73,831)
34,021
1,913
-
1,913
1,913
-
-
7,458
-
(6,643)
-
2,728
2,728
-
2,728
Total
$’000
111,221
(60,099)
51,122
51,122
269
249
7,458
(6)
-
(15,269)
43,823
119,231
(75,408)
43,823
(a) Depreciation
Items of plant and equipment are depreciated on a straight-line basis over their estimated useful lives, the duration of which reflects the useful
lives depending on the nature of the asset. The group uses the straight-line method when depreciating property, plant and equipment, resulting in
estimated useful lives for each class of depreciable assets as follows:
Class of fixed asset
Properties
Plant and equipment – mine camp
Plant and equipment – mill refurbishments
Plant and equipment – tailings dam
Plant and equipment – computers
Plant and equipment – office equipment
Plant and equipment – office furniture
Plant and equipment – other
Mine and exploration equipment
Motor vehicles
Useful life
40 years
2 – 15 years
3 - 5 years
5 years
4 years
3 – 10 years
10 – 25 years
2.5 – 25 years
2 – 33.3 years
8 – 12 years
Key judgement, estimates and assumptions: Depreciation
The estimations of useful lives, residual value and depreciation methods require management judgement and are reviewed bi-annually for all
major items of plant and equipment. If they need to be modified, the change is accounted for prospectively from the date of reassessment
until the end of the revised useful life (for both the current and future years).
103
Annual Report 2020 NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 8: PROPERTY, PLANT AND EQUIPMENT (continued)
(b) Derecognition
An item of property, plant and equipment is derecognised when it is sold or otherwise disposed of, or when its use is expected to bring no future
economic benefits. Gains and losses on derecognising assets are determined by comparing proceeds with the carrying amount. These gains and
losses are included in the Income Statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset
are transferred to retained earnings.
(c) Impairment
Key judgements, estimates and assumptions: Impairment of assets
The group assesses each Cash-Generating Unit (CGU) at least annually, to determine whether there is any indication of impairment or
reversal of a prior impairment. Where an indicator of impairment or reversal exists, a formal estimate of the recoverable amount is made,
which is deemed as being the higher of the fair value less costs to sell and value in use. These assessments require the use of estimates and
assumptions such as ore reserves, future production, commodity prices, discount rates, exchange rates, operating costs, sustaining capital
costs, any future development cost necessary to produce the reserves (including the magnitude and timing of cash flows) and operating
performance.
Some of the factors considered in management’s assessment as to whether there existed any indicators of impairment at the
CGUs included:
• Strong operational and financial performance of the CGUs;
• The extension of mine life across all CGUs;
• Positive gold price environment against budget; and
• Acquisitions complementing the existing CGUs of the group.
(d) Recognition and measurement of property, plant and equipment
Cost
Each class of plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and
impairment losses.
Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to
the acquisition of the items.
Major spares purchased specifically for particular plant are capitalised and depreciated on the same basis as the plant to which they relate when in
use. Assets are depreciated or amortised from the date they are installed and are ready for use, or in respect of internally constructed assets, from
the time the asset is completed and deemed ready for use.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the Income Statement during the financial period in which they are incurred.
104
Ramelius Resources
NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 9: DEVELOPMENT ASSETS
Development assets
Less: accumulated amortisation
Net book amount
Development asset reconciliation
Opening net book amount
Additions on the acquisition of subsidiary
Additions
Restoration and rehabilitation adjustment
Transfer to property, plant and equipment
Transfer from exploration and evaluation asset
Amortisation
Closing net book amount
Note
15
8
10
2020
$’000
516,134
(307,866)
208,268
99,430
-
107,537
(4,753)
-
83,537
(77,483)
208,268
2019
$’000
330,866
(231,436)
99,430
84,728
13,759
57,159
3,164
(249)
7,096
(66,227)
99,430
(a) Impairment
No impairment of development assets arose during the 2020 financial year. Refer to Note 8(c) for further discussion on the impairment of assets
and the process undertaken by management in forming this conclusion.
(b) Recognition and measurement
Mine development
Development assets represent expenditure in respect of exploration, evaluation, feasibility and development incurred by or on behalf of the group,
including overburden removal and construction costs, previously accumulated and carried forward in relation to areas of interest in which mining
has now commenced. Such expenditure comprises net direct costs and an appropriate allocation of directly related overhead expenditure.
All expenditure incurred prior to commencement of production from each development property is carried forward to the extent to which
recoupment out of future revenue from the sale of production, or from the sale of the property, is reasonably assured.
When further development expenditure is incurred in respect of a mine property after commencement of production, such expenditure is carried
forward as part of the cost of the mine property only when future economic benefits are reasonably assured, otherwise the expenditure is
classified as part of the cost of production and expensed as incurred. Such capitalised development expenditure is added to the total carrying value
of development assets being amortised.
Deferred mining expenditure - Pre-production mine development
Pre-production mining costs incurred by the group in relation to accessing recoverable reserves are carried forward as part of ‘development assets’
when future economic benefits are established, otherwise such expenditure is expensed as part of the cost of production.
Deferred mining expenditure - Surface mining costs
Mining costs incurred during the production stage of operations are deferred, this is generally the case where there are fluctuations in deferred
mining costs over the life of the mine, and the effect is material. The amount of mining costs deferred is based on the ratio obtained by dividing
the volume of waste material moved by the volume of ore mined. Mining costs incurred in the period are deferred to the extent that the current
period waste to ore ratio exceeds the life-of-mine waste-to-ore (life of mine) ratio. The life of mine ratio is based on economically recoverable
reserves of the operation.
In the production stage of some operations, further developments of the mine require a phase of unusually high overburden removal activity that
is similar in nature to pre-production mine development. The costs of such unusually high overburden removal activity are deferred and charged
against reported profits in subsequent periods on a unit-of-production basis. The accounting treatment is consistent with that of overburden
removal costs incurred during the development phase of a mine, before production commences. Deferred mining costs that relate to the
production phase of the operation are carried forward as part of ‘development assets’. The amortisation of deferred mining costs is included in site
operating costs.
105
Annual Report 2020 NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 9: DEVELOPMENT ASSETS (continued)
Key judgement, estimates and assumptions: Production stripping
The life of mine ratio is a function of an individual mine’s design and therefore changes to that design will generally result in changes
to the ratio. Changes in other technical or economic parameters that impact reserves will also have an impact on the life of mine ratio
even if they do not affect the mine’s design. Changes to the life of mine ratio are accounted for prospectively.
Key judgement, estimates and assumptions: Deferred mining expenditure
The group defers mining costs incurred during the production stage of its operations. Changes in an individual mine’s design will generally
result in changes to the life of mine waste to ore (life of mine) ratio. Changes in other technical and economic parameters that impact
reserves will also have an impact on the life of mine ratio even if they do not affect the mine’s design. Changes to the life of mine ratio are
accounted for prospectively.
Key judgement, estimates and assumptions: Ore reserves
The group estimates ore reserves and mineral resources each year based on information compiled by Competent Persons as defined
in accordance with the Australian code for reporting Exploration Results, Mineral Resources and Ore Reserves 2012 (‘JORC code’).
Estimated quantities of economically recoverable reserves are based upon interpretations of geological models and require assumptions
to be made including estimates of short and long-term commodity prices, exchange rates, future operating performance and capital
requirements. Changes in reported reserve estimates can impact the carrying value of plant and equipment and development, provision for
restoration and rehabilitation obligations as well as the amount of depreciation and amortisation.
Key judgement, estimates and assumptions: Amortisation and impairment
The group uses the unit-of-production basis when depreciating / amortising mine specific assets which results in a depreciation /
amortisation charge proportional to the depletion of the anticipated remaining life of mine production. Economic life, which is assessed
annually, has due regard to both its physical life limitations and to present assessments of economically recoverable reserves of the mine
property. These calculations require the use of estimates and assumptions.
Development assets are amortised based on the unit-of-production method which results in an amortisation charge proportional to the
depletion of the estimated recoverable reserves. Where there is a change in the reserves the amortisation rate is adjusted prospectively in
the reporting period in which the change occurs. The net carrying values of development expenditure carried forward are reviewed half-
yearly by Directors to determine whether there is any indication of impairment, refer to Note 8 (d) for further information.
106
Ramelius Resources NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 10: EXPLORATION AND EVALUATION ASSETS
Exploration and evaluation
Exploration and evaluation asset reconciliation
Opening net book amount
Additions on the acquisition of subsidiary
Additions
Disposal
Impairment
Exchange differences
Transfer to development asset
Closing net book amount
Note
20
2(b)
9
2020
$’000
196,247
99,442
168,515
18,355
(208)
(6,336)
16
(83,537)
196,247
2019
$’000
99,442
19,317
72,262
17,732
-
(2,800)
27
(7,096)
99,442
(a) Transfer to development assets
During the year a total of $83,537,000 was transferred from exploration and evaluation assets to a mine development asset. These amounts related
to the Tampia Hill Gold Project and the Eridanus project (Mt Magnet). The Tampia Hill Gold Project costs were transferred to mine development
upon the completion of the Feasibility Study and subsequent investment decision with the project now moving into development. The Eridanus
transfer relates to the work completed to increase the Eridanus open pit project which resulted in a significantly larger open pit.
The Stage 2 cut back has commenced in July 2020.
(b) Recognition and measurement
Exploration and evaluation
Exploration and evaluation costs related to areas of interest are capitalised and carried forward to the extent that:
(a) Rights to tenure of the area of interest are current; and
(b) (i) Costs are expected to be recouped through successful development and exploitation of the area of interest or alternatively
by sale; or
(ii) Where activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves, active and significant operations in, or in relation to, the areas are continuing.
Such expenditure consists of an accumulation of acquisition costs and direct net exploration and evaluation costs incurred by or on behalf
of the group, together with an appropriate portion of directly related overhead expenditure.
Deferred feasibility
Feasibility expenditure represents costs related to the preparation and completion of feasibility studies to enable a development decision
to be made in relation to an area of interest and is capitalised as incurred.
When production commences, relevant past exploration, evaluation and feasibility expenditure in respect of an area of interest that has
been capitalised is transferred to mine development where it is amortised over the life of the area of interest to which it relates on a
unit-of-production basis.
When an area of interest is abandoned or the Directors decide it is not commercial, any accumulated costs in respect of that area are written off in
the year the decision is made. Each area of interest is reviewed at the end of each reporting period and accumulated costs written off to the extent
they are not expected to be recoverable in the future.
107
Annual Report 2020
NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 10: EXPLORATION AND EVALUATION ASSETS (continued)
Mineral rights
Mineral rights comprise identifiable exploration and evaluation assets, mineral resources and ore reserves, which are acquired as part of a business
combination or a joint venture and are recognised at fair value at date of acquisition. Mineral rights are attributable to specific areas of interest and
are classified within exploration and evaluation assets.
Mineral rights attributable to each area of interest are amortised when commercial production commences on a unit-of-production basis over the
estimated economic reserve of the mine to which the rights related.
Impairment
Impairment of specific exploration and evaluation assets during the year have occurred where Directors have concluded that capitalised
expenditure is unlikely to be recovered by sale or future exploitation. At each reporting date the group undertakes an assessment of the carrying
amount of its exploration and evaluation assets. During the year indicators of impairment were identified on certain exploration and evaluation
assets in accordance with AASB 6 Exploration for and Evaluation of Mineral Resources. As a result of this review, an impairment loss of $6,336,000
(2019: $2,800,000) has been recognised in relation to areas of interest where the Directors have concluded that capitalised expenditure is unlikely
to be recovered by sale or future exploitation.
Key judgement, estimates and assumptions: Exploration, evaluation and deferred feasibility expenditure
Judgement is required to determine whether future economic benefits are likely, from either exploitation or sale, or whether activities have
not reached a stage that permits a reasonable assessment of existence of reserves. In addition to these judgements, the group has to make
certain estimates and assumptions. The determination of JORC resources is itself an estimation process that involves varying degrees of
uncertainty depending on how the resources are classified (i.e. measured, indicated or inferred). The estimates directly impact when the
group capitalises exploration and evaluation expenditure. The capitalisation policy requires management to make certain estimates and
assumptions as to future events and circumstances, in particular, the assessment of whether economic quantities of reserves will be found.
Any such estimates and assumptions may change as new information becomes available.
NOTE 11: TRADE AND OTHER PAYABLES
Trade payables
Other payables and accruals
Total trade and other payables
(a) Recognition and measurement
2020
$’000
23,350
58,952
82,302
2019
$’000
9,436
35,490
44,926
Trade and other payables
Liabilities for trade and other payables are initially recorded at the fair value of the consideration to be paid in the future for goods and
services received, whether or not billed to the group, and then subsequently at amortised cost. Trade payables are unsecured and are usually paid
within 30 days of recognition. The carrying amounts of trade and other payables are assumed to be the same as their fair values, due to their short-
term nature.
Risk exposure
The group’s exposure to cash flow risk is discussed in Note 18.
108
Ramelius Resources NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 12: BORROWINGS
Current
Secured bank loans
Less: capitalised borrowing costs
Total current borrowings
2020
$’000
24,375
(900)
23,475
2019
$’000
-
-
-
(a) Secured liabilities and assets pledged as security
Secured Bank Loans
Ramelius Resources Limited entered into a Syndicated Facility Agreement (SFA) with the Commonwealth Bank of Australia, BNP Paribas, and the
National Australia Bank. The SFA and associated documents provide for the provision of working capital and performance bond facilities totalling
$35,000,000. The facility has been established to provide financial support for working capital purposes but also for any corporate asset acquisitions
that the Company may undertake at a future date. The SFA has been structured such that the quantum available could be increased subject to the
approval of the syndicate members including the completion of satisfactory due diligence on the company or asset in questions.
The group has granted a security interest over all of its assets in favour of CBA Corporate Services (NSW) Pty Ltd as security trustee. As at the
date of this report the assets of Spectrum Metals Limited, Red Dirt Mining Pty Limited, and Zebra Minerals Pty Limited were not included in this
security arrangement.
A total of $32,500,000 was drawn on the SFA in March 2020 to provide the Company with additional working capital, should it be needed, during
the global COVID-19 pandemic. The bank loan under the SFA is repayable in full before 30 June 2021.
The carrying amounts of the financial and non-financial assets pledged as security for the secured borrowings are disclosed in Note 29.
(b) Compliance with loan covenants
Ramelius Resources Limited has complied with the financial and non-financial covenants of the SFA during the 2020 reporting period.
(c) Fair value
For the secured bank loans under the SFA, the fair values are not materially different from their carrying amounts, since the interest payable on
the secured bank loan is close to current market rates and the secured bank loan is of a short term nature.
(d) Risk exposures
Details of the group’s exposure to risks arising from borrowings are set out in Note 18.
109
Annual Report 2020 NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 13: LEASE LIABILITIES
Current
Current
Non-current
Total lease liability
Set out below are the carrying amounts of lease liabilities and the movements during the year:
As at 1 July 2019
Additions
Interest expense (note 2(c))
Payments
As at 30 June 2020
Maturity analysis:
Year 1
Year 2
Year 3
Year 4
Gross lease liability
Less future interest charges
Total lease liability
2019
$’000
-
-
-
2020
$’000
16,643
13,846
30,489
2020
$’000
21,256
23,961
1,009
(15,737)
30,489
17,431
8,064
4,269
2,057
31,821
(1,332)
30,489
(a) First time adoption of AASB 16 Leases
The group has adopted AASB 16 Leases (AASB 16) for the first time as of 1 July 2019. The nature and effect of the changes as a result of the
adoption of AASB 16 are described below.
Overview
AASB 16 supersedes AASB 117 Leases, Interpretation 4 Determining whether an Arrangement contains a Lease, Interpretation 115 Operating Leases
- Incentives and Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. AASB 16 sets out the principles for the
recognition, measurement, presentation and disclosure of leases and requires lessees to recognise most leases on the balance sheet under a single
on-balance sheet model.
Impact on the group
The leases recognised by the group under AASB 16 predominantly relate to mining equipment utilised under mining services contracts and power
infrastructure utilised under power supply contracts. The group does not have any sub-leases.
Before the adoption of AASB 16, the group classified each of its leases (as lessee) at inception as either a finance lease or operating lease. As at
30 June 2019 the group had no finance leases. Refer to below for the accounting policy prior to 1 July 2019.
The group adopted AASB 16 using the modified retrospective approach, with the date of initial application of 1 July 2019. Under this method, the
standard has been applied retrospectively with the cumulative effect of initially applying the standard recognised as an adjustment to the opening
balance of retained earnings at the date of initial application and comparatives have not been restated. The group has applied the new definition of
a lease to all contracts still effective at the date of initial application.
Upon adoption of AASB 16, the group applied a single recognition and measurement approach for all leases except for short-term leases and leases
of low-value assets. Refer below for the accounting policy beginning 1 July 2019.
110
Ramelius Resources NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 13: LEASE LIABILITIES (continued)
Leases previously accounted for as operating leases or operating expenses
All the group’s existing leases were operating leases. Some mining services and other service contracts, which were previously expensed to the
income statement as operating expenses, are now determined to be leases based on the AASB 16 definition of a lease.
The group recognised right-of-use assets and lease liabilities for those leases previously classified as operating leases and service contracts that meet
the new definition of a lease, except for short-term leases with lease terms that end within 12 months of the date of initial application and leases of
low-value assets.
The right-of-use assets for all leases were recognised based on the amount equal to the lease liabilities, or, as if AASB 16 had been applied from the
commencement of the lease. The determination as to how to measure the lease asset is made on a lease by lease basis. No adjustments
were needed for any previously recognised prepaid or accrued lease expenses as there were none. Lease liabilities were recognised based on
the present value of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial application.
The group also applied the available practical expedients wherein it:
• Applied a single discount rate to a portfolio of leases with reasonably similar characteristics.
• Applied the short-term leases exemptions to leases with lease terms that end within 12 months of the date of initial application.
• Used hindsight in determining the lease term where the contract contained options to extend or terminate the lease.
As per AASB 16 the comparative information has not been restated for the impact of the application of AASB 16.
Impact of adoption
The effect (increase/(decrease)) of adopting AASB 16 as at 1 July 2019 is set out below:
Impact on Balance Sheet:
Assets
Property, plant and equipment
Deferred tax assets
Total assets
Liabilities
Lease liabilities
Current
Non-current
Total liabilities
Net assets
Equity
Retained earnings
Total Equity
As at 1 July 2019:
1 July 2019
$’000
20,262
298
20,560
10,614
10,642
21,256
(696)
(696)
(696)
• Right-of-use assets were recognised and presented as part of Property, plant and equipment.
•
•
Initial lease liabilities were recognised and presented separately in the balance sheet, showing the current and non-current commitments.
Additional deferred tax assets were recognised because of the deferred tax impact of the changes in recognised lease-related assets
and liabilities.
111
Annual Report 2020
NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 13: LEASE LIABILITIES (continued)
Reconciliation of operating lease commitments as at 30 June 2019
The lease liabilities as at 1 July 2019 can be reconciled to the operating lease commitments as at 30 June 2019 as follows:
Lease liabilities recognised on transition:
Operating lease commitments disclosed at 30 June 2019
Add: Service contracts1
Add: Adjustments for future rate increases2
Less: Present value discounting of lease liabilities3
Less: Short term leases4
Less: Low value leases4
Lease liabilities recognised on transition
1 July 2019
$’000
1,343
20,243
18
(42)
(253)
(53)
21,256
1. Mining contracts previously expensed as incurred are included as the contracts contain the use of assets that meet the AASB 16 definition of a lease.
2. As per the measurement requirements of AASB 16, the lease liabilities are measured taking into account adjustments for future rate increases.
3.
4.
Lease liabilities were discounted using a weighted average discount rate of 3.61% per annum.
As permitted by AASB 16, the group has elected not to recognise right-of-use assets and lease liabilities relating to short-term leases and leases for
which the underlying assets are of low value.
Right-of-use assets
The group has lease contracts for various items of mining equipment, power infrastructure, motor vehicles and buildings used in its operations.
These leases generally have lease terms between two and five years. The group’s obligations under its leases are secured by the lessor’s title to the
leased assets. Generally, the group is restricted from assigning and subleasing the leased assets.
The group also has certain leases of assets with lease terms of 12 months or less and leases of storage containers and equipment for which the
assets are of low value. The group applies the short-term lease and lease of low-value assets recognition exemptions for these leases.
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period (as shown in property, plant
and equipment):
2020
As at 1 July 2019
Additions
Depreciation charge
As at 30 June 2020
Land and
buildings
$’000
Plant and
equipment
$’000
428
-
(151)
277
19,654
23,708
(14,229)
29,133
Vehicles
$’000
180
253
(144)
289
Total
$’000
20,262
23,961
(14,524)
29,699
Impact on the income statement
The following amounts are recognised in the income statement:
Impact on income statement
Note
30 June 2020
$’000
The application of AASB 16 has resulted in the following amounts being recorded in the
income statement for the year ended 30 June 2020:
Depreciation of right-of-use asset
Interest expense
Income tax expense
Total amount recorded in the income statement resulting from AASB 16
8
2(c)
3
14,524
1,009
61
15,594
Payments of $6,180,000 for short term leases (lease term of 12 months or less) and payments of $75,000 for leases of low value assets were
expensed in the income statement for the year ended 30 June 2020.
112
Ramelius Resources
NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 13: LEASE LIABILITIES (continued)
(b) Accounting policy - Leases
Accounting policy applicable prior to 1 July 2019
The determination of whether a contract is, or contains, a lease is based on the substance of the contract at the date of inception. The contract
is assessed to determine whether fulfilment is dependent on the use of a specific asset (or assets) and the contract conveys a right to use the asset
(or assets), even if that asset is (or those assets) are not explicitly specified in the contract. The group is not a lessor in any transactions, it
is only a lessee.
Operating lease payments are recognised as an operating expense in the statement of profit or loss and other comprehensive income on a straight-
line basis over the lease term.
Accounting policy applicable from 1 July 2019
When a contract is entered into the group assesses whether the contract contains a lease. A lease arises when the group has the right to direct
the use of an identified asset which is not substitutable and to obtain substantially all economic benefits from the use of the assets throughout the
period of use. The group separates the lease and non-lease components of the contract and accounts for these separately.
The group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets.
The group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
Right-of-use assets
The group recognises right-of-use assets at the commencement date of the lease (i.e., the date when the underlying asset is available for use). Right-
of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities.
The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before
the commencement date plus any make-good obligations.
Right-of-use assets are depreciated using the straight-line method over the shorter of their useful life and the lease term as follows:
• Mining equipment
2 to 5 years
• Motor vehicles
2 to 5 years
• Buildings
3 years
Periodic adjustments are made for any re-measurement of the lease liabilities and for impairment losses, assessed in accordance with
the group’s impairment policies.
Lease liabilities
Lease liabilities are initially measured as the present value of future minimum lease payments, discounted using the group’s incremental borrowing
rate if the rate explicit in the lease cannot be readily measured at amortised cost using the effective interest rate over the lease term. Minimum
lease payments are fixed payments or index-based variable payments incorporating the group’s expectations of extension options and do not
include non-lease component of a contract. Variable lease payments that do not depend on an index or a rate are recognised as expenses in the
period in which the event or condition that triggers the payment occurs.
The lease liability is remeasured when there are changes in the future lease payments arising from a change in rates, index, or lease terms from
exercising an extension or termination options. A corresponding adjustment is made to the carrying amount of the lease assets, with any excess
recognised in the income statement.
Short-term leases and leases of low-value assets
The group applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less
from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases
of plant and equipment that are of low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense as
they are incurred.
113
Annual Report 2020
NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 13: LEASE LIABILITIES (continued)
Key judgements, estimates and assumptions: Leases
Identification of non-lease components
In addition to containing a lease, the group’s mining services contracts involves the provision of additional services, including personnel
cost, low value materials, drilling, hauling related activities and other items. These are non-lease components and the group has elected to
separate these from the lease components.
Judgement is required to identify each of the lease and non-lease components. The consideration in the contract is then allocated between
the lease and non-lease components on a relative stand-alone price basis. This requires the group to estimate stand-alone prices for each
lease and non-lease component based on quoted prices within the contract.
Identifying in-substance fixed rates versus variable lease payments
The lease payments used to calculate the lease-related balances under AASB 16 include fixed payments, in-substance fixed payments and
variable payments based on an index or rate. Variable payments not based on an index or rate are excluded from the measurement of
lease liabilities and related assets.
For the group’s mining services contracts, in addition to the fixed payments, there are payments that are variable payments because the
contract terms require payment based on a rate per hour. In terms of AASB 16, the group uses judgement to determine that no minimum
hours or volumes within the contract are a fixed minimum that results in an amount payable that is unavoidable.
Therefore, the group has had to apply judgement to determine that there are no in-substance fixed payments included in the lease
payments used to calculate the lease-related balances. Payments identified as variable not based on an index or rate, are excluded from
recognition and measurement of the lease-related balances.
Estimating the incremental borrowing rate
The group cannot readily determine the interest rate implicit in its leases. Therefore, it uses the relevant incremental borrowing rate (IBR)
to measure lease liabilities. The IBR is the rate of interest that the group would have to pay to borrow over a similar term, and with a
similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The
IBR, therefore, reflects what the group would have to pay, which requires estimation when no observable rates are available and to make
adjustments to reflect the terms and conditions of the lease. The group estimates the IBR using observable inputs (such as market interest
rates) when available and considered certain contract and entity-specific judgements estimates (such as the lease term and credit rating).
The IBR range used by the group was between 3.14% and 3.61%.
114
Ramelius Resources NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 14: CONTINGENT CONSIDERATION
Current
Edna May contingent consideration
Non-current
Edna May contingent consideration
Total contingent consideration
Movements
Balance as at 1 July 2019
Unwinding of discount rate
Change in fair value of contingent consideration
Total contingent consideration
2019
$’000
-
12,121
12,121
2020
$’000
6,261
6,923
13,184
Contingent
consideration
$’000
12,121
1,236
(173)
13,184
Note
2(c)
1(b)
Significant estimate: Contingent consideration
The purchase consideration for Edna May included contingent consideration of:
•
•
$20,000,000 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 $30,000,000 payable at $60/oz from gold production over 200,000 ounces
(or up to $50,000,000 payable at $100/oz if the Edna May Stage 3 open pit decision-to-mine is not Board approved).
The potential undiscounted amount payable under the agreement is between $0 and $50,000,000.
The fair value of the contingent consideration has been revalued at 30 June 2020 which resulted in a reduction of the contingent
consideration of $173,000 which has been recorded in the income statement.
115
Annual Report 2020
NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 15: PROVISIONS
Current
Employee benefits
Rehabilitation and restoration costs
Total current provisions
Non-current
Employee benefits
Rehabilitation and restoration costs
Total non-current provisions
Rehabilitation and restoration costs
Opening book amount
Revision of provision during the year
Expenditure on rehabilitation and restoration
Discount unwind
Total provision for rehabilitation and restoration
Rehabilitation and restoration costs
Current
Non-current
Total provision for rehabilitation and restoration
Note
9
2
2020
$’000
6,804
2,415
9,219
418
38,302
38,720
46,371
(4,753)
(1,540)
639
40,717
2,415
38,302
40,717
2019
$’000
6,089
763
6,852
379
45,608
45,987
42,489
3,150
(209)
941
46,371
763
45,608
46,371
(a) Revision of rehabilitation and restoration provision
Represents amendments to future restoration and rehabilitation liabilities resulting from changes to the approved mine plan in the financial
year, initial recognition of new rehabilitation provisions as well as a change in provision assumptions. Key provision assumption changes include
reassessment of costs and timing of expenditure.
(b) Recognition and measurement
Provisions
Provisions are recognised when the group has a present obligation (legal or constructive) as a result of a past event, it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount
of the obligation.
Employee Benefits - Wages, salaries, salary at risk, annual leave and sick leave
Liabilities arising in respect of wages and salaries, bonuses, annual leave and any other employee benefits expected to be wholly settled within
12 months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the
liabilities are settled. These amounts are recognised in ‘trade and other payables’ (for amounts other than annual leave and bonuses) and ‘current
provisions’ (for annual leave and bonuses) in respect of employee services up to the reporting date. Costs incurred in relation to
non-accumulating sick leave are recognised when the leave is taken and are measured at the rate paid or payable.
116
Ramelius Resources NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 15: PROVISIONS (continued)
Long service leave
The liability for long service leave is measured at the present value of the estimated future cash outflows to be made by the group resulting from
employees’ services provided up to the reporting date. Liability for long service leave benefits not expected to be settled within 12 months are
discounted using the rates attaching to high quality corporate bonds at the reporting date, which most closely match the terms of maturity of the
related liability. In determining the liability for these long-term employee benefits, consideration has been given to expected future increases in wage
and salary rates, the group’s experience with staff departures and periods of service. Related on-costs have also been included in the liability.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at
least 12 months after the reporting period, regardless of when the actual settlement is expected to occur.
Defined contribution superannuation plans
Contributions to defined contribution superannuation plans are expensed when incurred.
Provision for restoration and rehabilitation
Estimated costs of decommissioning and removing an asset and restoring the site are included in the cost of the asset as at the date the obligation
first arises and to the extent that it is first recognised as a provision. The group records the present value of the estimated cost of constructive and
legal obligations to restore operating locations in the period in which the obligation is incurred. The nature of decommissioning activities includes
dismantling and removing structures, rehabilitating mine sites, dismantling operating facilities, closure of plant and waste sites and restoration,
reclamation and revegetation of affected areas.
Typically, the obligation arises when the asset is installed, or the environment is disturbed at the development location. When the liability is initially
recorded, the present value of the estimated cost is capitalised by increasing the carrying amount of the related mining assets. Over time, the
discounted liability is increased for the change in the present value based on the discount rates that reflect the current market assessments and
the risks specific to the liability. Additional disturbances or changes in decommissioning costs will be recognised as additions or changes to the
corresponding asset and rehabilitation liability when incurred.
The unwind effect of discounting the provision is recorded as a finance cost in the Income Statement and the carrying amount capitalised as a part
of mining assets is amortised on a unit-of-production basis. Costs incurred that relate to an existing condition caused by past operations, but do not
have future economic benefits, are expensed as incurred.
Key judgement, estimates and assumptions: Provision for restoration and rehabilitation
The group assesses its mine restoration and rehabilitation provision bi-annually in accordance with the accounting policy. Significant
judgement is required in determining the provision for restoration and rehabilitation as there are many transactions and other factors
that will affect the ultimate liability payable to rehabilitate and restore the mine sites. The estimate of future costs therefore requires
management to make assessment of the future restoration and rehabilitation date, future environmental legislation, changes in regulations,
price increases, changes in discount rates, the extent of restoration activities and future removal and rehabilitation technologies. When
these factors change or become known in the future, such differences will impact the restoration and rehabilitation provision in the period
in which they change or become known. At each reporting date the rehabilitation and restoration provision is remeasured to reflect any of
these changes.
Key judgement, estimates and assumptions: Long service leave
Management judgement is required in determining the following key assumptions used in the calculation of long service leave at
balance sheet date:
- Future increase in salaries and wages;
- Future on cost rates; and
- Future probability of employee departures and period of service.
117
Annual Report 2020
NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 16: SHARE CAPITAL
Ordinary shares
Share capital at 30 June 2018
Shares issued as part of the acquisition of Explaurum1
Shares issued from exercise of performance rights
Shares issued from exercise of options
Transfer from share based payments reserve
At 30 June 2019
Shares issued as part of the acquisition of Spectrum1
Shares issued from exercise of performance rights
Shares issued from exercise of options
Transfer from share based payments reserve
At 30 June 2020
Note
Number of shares
$’000
528,509,008
127,778,619
85,342
1,500,000
-
657,872,969
145,203,969
1,377,522
1,500,000
-
805,954,460
149,568
64,232
28
300
90
214,218
155,523
598
300
142
370,781
20
1. Represents the value of shares at the date of issue. Refer to Note 17 for details on the NCI reserve.
(a) Recognition and measurement
Share capital
Ordinary share capital is classified as equity and is recognised at fair value of the consideration received by the group. Any transaction costs arising
on the issue of ordinary shares and the associated tax are recognised directly in equity as a reduction of the share proceeds received.
Ordinary shares
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders’
meetings other than voting exclusions as required by the Corporations Act 2001. In the event of winding up of the Company, ordinary shareholders
rank after all creditors and are fully entitled to any proceeds of liquidation.
Options over shares
Refer Note 26 for further information on options, including details of any options issued, exercised and lapsed during the financial year and options
over shares outstanding at financial year end.
Rights over shares
Refer Note 26 for further information on rights, including details of any rights issued, exercised and lapsed during the financial year and rights
over shares outstanding at financial year end.
118
Ramelius Resources NOTES TO THE
FINANCIAL STATEMENTS
Key numbers (continued)
NOTE 17: RESERVES
Share-based payments reserve
Financial assets at FVOCI
Other
NCI acquisition reserve
Foreign currency translation reserve
Total reserves
2020
$’000
3,422
(317)
634
(38,395)
(51)
(34,707)
2019
$’000
2,032
(383)
634
(9,926)
(31)
(7,674)
Share-based payment reserve
Share-based payments reserve records items recognised as expenses on valuation of employees share options and rights.
Financial assets at FVOCI
The group has elected to recognise changes in the fair value of certain investments in equity securities in OCI. These changes are accumulated
within the FVOCI reserve within equity. The group transfers amounts from this reserve to retained earnings when the relevant equity securities are
derecognised.
Non-Controlling Interest (NCI) acquisition reserve
The NCI acquisition reserve represents the incremental increase in the Ramelius share price on the acquisition of non-controlling interest post the
date control was obtained. This reserve relates to the acquisition of Spectrum Metals Limited and Explaurum Limited.
Foreign currency translation reserve
Foreign currency translation reserve comprises all foreign exchange difference arising from the translation of the financial statements of foreign
operations where their functional currency is different to the presentation currency of the reporting entity.
Risk
NOTE 18: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
The Directors are responsible for monitoring and managing financial risk exposures of the group. The group holds the following financial assets and
liabilities:
Financial assets
Cash at bank
Term deposits
Trade and other receivables
Secured term deposits with financial institutions
Other security bonds and deposits
Financial assets at FVOCI
Total financial assets
Financial liabilities
Trade and other payables
Lease Liabilities
Borrowings
Total financial liabilities
2020
$’000
125,670
40,000
3,234
3,370
503
624
173,401
82,302
30,489
23,475
136,266
2019
$’000
40,815
55,000
6,774
7,500
488
101
110,678
44,926
-
-
44,926
119
Annual Report 2020 NOTES TO THE
FINANCIAL STATEMENTS
Risk (continued)
NOTE 18: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
(a) Recognition and measurement
Initial recognition and measurement
Financial instruments are initially measured at fair value plus transaction costs except where the instrument is classified ‘at fair value through profit
or loss’ in which case transaction costs are expensed immediately.
(b) Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest rate method or at cost. Fair value
represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. Quoted prices in an active market are used to determine fair value where possible. The group does not designate any
interest in subsidiaries, associates or joint venture entities as being subject to the requirements of accounting standards specifically applicable to
financial instruments.
Amortised Cost
Amortised cost amounts are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are
subsequently measured at amortised cost using the effective interest rate method.
Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.
Fair value through other comprehensive income (FVOCI)
FVOCI financial assets include any financial assets not included in the above categories.
(c) Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all
unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.
(d) Expected loss
At each reporting date, the group assesses whether there is objective evidence that a financial instrument has been impaired. If there is objective
evidence of impairment, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any
impairment loss on that financial asset previously not recognised in the profit or loss - is removed from equity and recognised in profit or loss.
Management of financial risk
The group’s management of financial risk is aimed at ensuring cash flows are sufficient to:
• Withstand significant changes in cash flow at risk scenarios and meet all financial commitments as and when they fall due; and
• Maintain the capacity to fund future project development, exploration and acquisition strategies.
The group continually monitors and tests its forecast financial position against these criteria.
The group is exposed to the following financial risks: liquidity risk, credit risk and market risk (including foreign exchange risk, commodity price risk
and interest rate risk).
(a) Liquidity risk
The group manages liquidity risk by monitoring immediate and forecasted cash requirements and ensures adequate cash reserves are maintained to
pay debts as and when due.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate
amount of committed credit facilities to meet obligations when due. At the end of the financial year the group held short term on demand cash
balances of $125,670,000 (2019: $40,815,000) that is available for managing liquidity risk. In addition to this short term deposits at call totalled
$40,000,000 (2019: $55,000,000). During the year the group established a credit facility to reduce liquidity risk, this facility was fully drawn on during
the financial year. At the end of the financial year the group did not have access to any undrawn borrowing facilities.
Management monitors rolling forecasts of the group’s available cash reserve on the basis of expected cash flows to manage any potential future
liquidity risks.
120
Ramelius Resources
NOTES TO THE
FINANCIAL STATEMENTS
Risk (continued)
NOTE 18: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
(i) Maturities of financial liabilities
The tables below analyse the group’s financial liabilities into relevant groupings based on their contractual maturities. The amounts disclosed in
the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting
is not significant.
Maturities of financial liabilities
Less than 6
months
$’000
6 – 12
months
$’000
Between
1 and 2 years
$’000
Between
2 and 5 years
$’000
As at 30 June 2020
Trade and other payables
Borrowings
Lease liabilities
Contingent consideration
Total non-derivatives
As at 30 June 2019
Trade and other payables
Contingent consideration
Total non-derivatives
72,412
16,250
9,238
1,964
99,864
44,926
-
44,926
9,890
8,125
7,404
4,298
29,717
-
7,855
7,855
-
-
7,711
6,025
13,736
-
6,110
6,110
-
-
6,136
2,118
8,254
-
722
722
Total
contractual
cash flows
$’000
Carrying
amount of
liabilities
$’000
82,302
24,375
30,489
14,405
151,571
82,302
23,475
30,489
13,184
149,450
44,926
14,687
59,613
44,926
12,121
57,047
(b) Credit risk exposures
Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. The credit risk on financial assets
of the entity which have been recognised in the Balance Sheet is the carrying amount, net of any provision for doubtful debts. Credit risk is
managed through the consideration of credit worthiness of customers and counterparties. This ensures to the extent possible, that customers
and counterparties to transactions are able to pay their obligations when due and payable. Such monitoring is used in assessing impairment.
(i) Past due but not impaired
As at 30 June 2020 there were no receivables past due but not impaired (2019: NIL).
(ii) Impaired trade receivables
Individual receivables which are known to be uncollectable are written off by reducing the carrying amount directly. The other receivables are
assessed to determine whether there is objective evidence that an impairment has been incurred but not yet identified. For these receivables, the
estimated impairment losses are recognised in a separate provision for impairment. The group considers that there is evidence of impairment if any
of the following indicators are present:
• significant financial difficulties of the debtor,
• probability that the debtor will enter bankruptcy or financial reorganisation, and
• default or delinquency in payments (past due).
Receivables for which an impairment provision was recognised are written off against the provision when there is no expectation of recovering
additional cash. Impairment losses are recognised in profit or loss within other expenses. Subsequent recoveries of amounts previously written off
are credited against other expenses.
(c) Market risk
i. Foreign currency risk
The group undertakes transactions impacted by foreign currencies; hence exposures to exchange rate fluctuations arise. The majority of the
group’s revenue is affected by movements in USD:AUD exchange rate that impacts on the Australian gold price whereas the majority of costs
(including capital expenditure) are in Australian dollars. The group considers the effects of foreign currency risk on its financial position and financial
performance and assesses its option to hedge based on current economic conditions and available market data.
121
Annual Report 2020
NOTES TO THE
FINANCIAL STATEMENTS
Risk (continued)
NOTE 18: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
ii. Commodity price risk
The group’s revenue is exposed to commodity price fluctuations, in particular to gold prices. Price risk relates to the risk that the fair value of future
cash flows of gold sales will fluctuate because of changes in market prices largely due to demand and supply factors for commodities and gold price
commodity speculation. The group is exposed to commodity price risk due to the sale of gold on physical delivery at prices determined by markets
at the time of sale. The group manages commodity price risk as follows:
Forward sales contracts
Gold price risk is managed through the use of forward sales contracts which effectively fix the Australian Dollar gold price and thus provide
cash flow certainty. These contracts are accounted for as sale contracts with revenue recognised once gold has been physically delivered into the
contract. The physical gold delivery contracts are considered a contract to sell a non-financial item and therefore do not fall within the scope of
AASB 9 Financial Instruments. At 30 June 2020, the group had 247,350 ounces in forward sales contracts at an average price of A$2,135.
Refer to Note 23 for further details.
Put options
Gold price risk may be managed with the use of hedging strategies through the purchase of gold put options to establish gold ’floor prices’ in
Australian dollars over the group’s gold production; however, this is generally at levels lower than current market prices. These put options enable
Ramelius to retain full exposure to current, and any future rises in the gold price while providing protection to a fall in the gold price below the
strike price. Gold put options are marked to market at fair value through the income statement.
Gold prices, cash flows and economic conditions are constantly monitored to determine whether to implement a hedging program.
(d) Gold price sensitivity analysis
The group has performed a sensitivity analysis relating to its exposure to gold price risk at reporting date. This sensitivity analysis demonstrates the
effect on the current year results and equity.
Based on gold sales of 67,410oz (228,210 oz less forward sales of 160,800oz) in 2020 and 39,102oz (200,352oz less forward sales of 161,250oz)
in 2019, if gold price in Australian dollars had changed by + / - A$100, with all other variables remaining constant, the estimated realised impact on
pre-tax profit (loss) and equity would have been as follows:
Impact on pre-tax profit
Increase in gold price by A$100
Decrease in gold price by A$100
Impact on equity
Increase in gold price by A$100
Decrease in gold price by A$100
2020
$’000
6,741
(6,741)
6,741
(6,741)
2019
$’000
3,910
(3,910)
3,910
(3,910)
(e) Fair value measurement
The financial assets and liabilities of the group are recognised on the balance sheet at their fair value in accordance with the group’s accounting
policies. Measurement of fair value is grouped into levels based on the degree to which fair value is observable in accordance with AASB 7 Financial
Instruments: Disclosure.
-
-
-
Level 1 - fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for
the asset or liability, either directly (as prices) or indirectly (derived from prices).
Level 3 - fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
122
Ramelius Resources
NOTES TO THE
FINANCIAL STATEMENTS
Risk (continued)
NOTE 18: FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
(f) Fair value measurement of financial instruments
Derivative financial assets are measured at fair value using valuation techniques which maximise the use of observable market data and rely as little
as possible on entity specific estimates. The valuations would be recognised as a Level 2 in the fair value hierarchy as they have been derived using
inputs from a variety of market data. Available-for-sale financial assets are measured at fair value using the closing price on the reporting date as
listed on the Australian Securities Exchange Limited (ASX). Available for sale financial assets are recognised as a Level 1 in the fair value hierarchy as
defined under AASB 7 Financial Instruments: Disclosures. The carrying amounts of trade receivables and payables are assumed to approximate their
fair values due to their short-term nature.
NOTE 19: CAPITAL RISK MANAGEMENT
(a) Risk management
The group’s objectives when managing capital are to:
•
Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other
stakeholders, and
• Maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to
shareholders, or issue new shares.
Loan covenants
Under the terms of the SFA the group is required to comply with financial and non-financial covenants. The group has complied with these
covenants throughout the financial year.
(b) Dividends
Ordinary shares
Final ordinary dividend for the 2019 financial year of 1 cent (2018: nil) per fully paid share
paid on 4 October 2019
Total dividends paid
Franked dividends
Franking credits available for subsequent reporting periods based on a tax rate of 30%
(2019 – 30%)
2020
$’000
6,579
6,579
2019
$’000
-
-
41,486
21,826
The above represents the balance of the franking account as at the end of the reporting period, adjusted for:
- Franking credits / debits that will arise from payment of any current tax liability / current tax asset, and
- Franking debits that will arise from the payment of dividends recognised as a liability at the reporting date.
123
Annual Report 2020
NOTES TO THE
FINANCIAL STATEMENTS
Group structure
NOTE 20: ASSET ACQUISITIONS
(a) Penny Gold Project (Spectrum Metals Limited)
The Penny Gold Project was the primary asset of Spectrum Metals Limited (Spectrum), which was acquired by Ramelius during the year.
The Penny Gold Project is located 130km south-east of Ramelius’ Mt Magnet mining and processing operations and approximately 500km
north-east of Perth in Western Australia. The Penny Gold Project currently has a Mineral Resource of 300,000 ounces and an Ore Reserve of
230,000 ounces (refer to ASX Announcement dated 30 June 2020 ‘Ramelius Extends Life of Mine Plan by 34% to 1.45Moz’ for full details).
On 10 February 2020 Ramelius announced an off-market takeover offer for Spectrum Metals Limited. Under the offer Spectrum shareholders received
one (1) Ramelius share for every ten (10) Spectrum shares held and cash consideration of A$0.017 for each Spectrum share held. On the same day, the
Spectrum Board unanimously recommended that Spectrum shareholders accept the Ramelius offer in the absence of a superior proposal.
Control was attained on 17 March 2020 with Ramelius holding a relevant intertest in Spectrum of 50.50%, or 727,402,825 Spectrum shares.
Ramelius obtained 100% control on 23 June 2020.
A total of $28,872,000 million cash consideration (net of cash acquired) was paid along with 145,203,969 Ramelius shares issued to Spectrum share
and option holders as part of the offer. Acquisition costs totalled $11,711,000 million which includes stamp duty on the transaction.
The group has determined that the transaction does not constitute a business combination in accordance with AASB 3 Business Combinations.
The acquisition of the net assets meets the definition of, and has been accounted for, as an asset acquisition. When an asset acquisition does not
constitute a business combination, the assets and liabilities are assigned a carrying amount based on their relative fair values in an asset purchase
transaction and no deferred tax will arise in relation to the acquired assets and assumed liabilities as the initial recognition exemption for deferred
tax under AASB 112 Income Taxes is applied. No goodwill arises on the acquisition and transactions costs of the acquisition are included in the
capitalised cost of the asset.
Details of the purchase consideration and the net assets acquired are as follows:
Purchase consideration:
Cash paid
Revaluation of on market acquisitions
Ordinary shares issued (145,203,969)
NCI reserve
Acquisition costs
Total purchase consideration
$’000
31,433
608
155,523
(28,469)
11,711
170,806
The fair value of the shares issued to gain control of Spectrum Metals Limited was based on the Ramelius share price on 17 March 2020 (the date
on which control was obtained) of $0.875 per share. The fair value of the shares issued post control being obtained was the share price at the date
the shares were issued. The difference between this share price and that at the date of control has been recorded in the NCI acquisition reserve
(see Note 17).
Net assets acquired:
Cash and cash equivalents
Trade and other receivables
Plant and equipment
Exploration and evaluation assets
Trade and other payables
Provisions
Net identifiable assets acquired
Outflow of cash to acquire subsidiary, net of cash acquired:
Cash consideration, net of receipts
Acquisition costs
Less: acquisition costs provided for but not paid
Less: cash balance acquired
Net outflow of cash – investing activities
124
$’000
2,562
132
365
168,515
(735)
(33)
170,806
31,433
11,711
(9,890)
(2,562)
30,692
Ramelius Resources NOTES TO THE
FINANCIAL STATEMENTS
Group structure (continued)
NOTE 20: ASSET ACQUISITIONS (continued)
(b) Tampia Hill Gold Project (Explaurum Limited)
On 4 April 2019, the company completed the acquisition of Explaurum Limited and its subsidiaries. The total purchase consideration was
$67,671,000 comprising cash paid of $8,472,000, shares issued (net of NCI reserve) of $54,306,000, and acquisitions related costs of $4,893,000.
The group determined that the transaction did not constitute a business combination in accordance with AASB 3 Business Combinations.
The acquisition of net assets meets the definition of, and has been accounted for, as an asset acquisition.
Details of the acquisition were disclosed in Note 17 of the group’s annual financial statements for the year ended 30 June 2019.
(c) Marda Gold Project (Black Oak Minerals Limited)
On 13 February 2019, the group completed the acquisition of the Marda Gold Project (Black Oak Minerals Limited). The total purchase
consideration was $13,901,000 comprising cash paid of $13,000,000, and acquisitions related costs of $901,000. The group determined that the
transaction did not constitute a business combination in accordance with AASB 3 Business Combinations. The acquisition of net assets meets the
definition of, and has been accounted for, as an asset acquisition.
Details of the acquisition were disclosed in Note 17 of the group’s annual financial statements for the year ended 30 June 2019.
NOTE 21: INTERESTS IN OTHER ENTITIES
Controlled entities
The group’s principal subsidiaries at 30 June 2020 are set out below. Unless otherwise stated, they have share capital consisting solely of ordinary
shares that are held directly by the group, and the proportion of ownership interests held equals the voting rights held by the group. The country
of incorporation or registration is also their principal place of business.
Name of Entity
Parent entity
Ramelius Resources Limited
Subsidiaries of Ramelius Resources Limited
Mt Magnet Gold Pty Limited
RMSXG Pty Limited
Ramelius USA Corporation
Ramelius Operations Pty Limited
Explaurum Limited
Subsidiaries of Mt Magnet Gold Pty Limited
Spectrum Metals Limited
Subsidiaries of Spectrum Metals Limited
Zebra Minerals Pty Limited
Red Dirt Mining Pty Limited
Subsidiaries of Ramelius Operations Pty Limited
Edna May Operations Pty Limited
Marda Operations Pty Limited
Subsidiaries of Explaurum Limited
Explaurum Operations Pty Limited
Ninghan Exploration Pty Limited
Country of
incorporation
Functional
currency
Percentage owned
2020
%
Percentage owned
2019
%
Australia
Australian dollars
Australia
Australia
USA
Australia
Australia
Australian dollars
Australian dollars
US dollars
Australian dollars
Australian dollars
Australia
Australian dollars
Australia
Australia
Australia
Australia
Australia
Australia
Australian dollars
Australian dollars
Australian dollars
Australian dollars
Australian dollars
Australian dollars
n/a
100
100
100
100
100
100
100
100
100
100
100
100
n/a
100
100
100
100
100
-
-
-
100
100
100
100
The parent entity and all subsidiaries of Ramelius, except for Ramelius USA Corporation and Spectrum Metals Limited (including all of its
subsidiaries), form part of the closed group detailed at Note 30. Spectrum Metals Limited (and all of its subsidiaries) will join the closed group in the
2021 financial year.
125
Annual Report 2020 NOTES TO THE
FINANCIAL STATEMENTS
Group structure (continued)
NOTE 21: INTERESTS IN OTHER ENTITIES (continued)
Joint operations
The group has the following direct interests in unincorporated joint operations at 30 June 2020 and 30 June 2019:
Joint operation project
Joint operation partner
Tanami
Jumbulyer
Nulla South
Gibb Rock
Coogee Farm-out
Parker Dome
Mt Finnerty
Jupiter
Tampia Hill
Dreadnought Resources Limited
Unlisted entity
Chalice Gold Mines Limited
Chalice Gold Mines Limited
Unlisted entity
Unlisted entity
Unlisted entity
Kinetic Gold#
Tampiagold Pty Ltd and Goldoro Pty Ltd
* Ramelius is earning into the joint ventures by undertaking exploration and evaluation activities.
# Kinetic Gold is a subsidiary of Renaissance Gold Inc.
The share of assets in unincorporated joint operations is as follows:
Principal
activity
Gold
Gold
Gold
Gold
Gold
Gold
Gold
Gold
Gold
Interest (%)
2020
-
-
0%*
0%*
Diluting 90%
0%*
0%*
0%*
90%
2019
85%
0%*
0%*
0%*
Diluting 100%
-
-
0%*
90%
Non-current assets
Exploration and evaluation assets (Note 10)
2020
$’000
684
2019
$’000
2,490
(a) Recognition and measurement
Under AASB 11 Joint Arrangements investments in joint arrangements are classified as either joint operations or joint ventures. The classification
depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement. Ramelius has
exploration related joint arrangements which are considered joint operations. Ramelius recognises its direct right to the assets, liabilities, revenues
and expenses of joint operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses. These have been incorporated
in the financial statements under the appropriate headings.
Unrecognised items
NOTE 22: CONTINGENT LIABILITIES
The Directors are of the opinion that the recognition of a provision is not required in respect of the following matters, as it is not probable that a
future sacrifice of economic benefits will be required, or the amount is not capable of reliable measurement.
(a) Bank guarantees
The group has negotiated a number of bank guarantees in favour of various government authorities and service providers. The total nominal
amount of these guarantees at the reporting date is $120,145 (2019: $370,145). These bank guarantees are fully secured by cash on term deposit.
126
Ramelius Resources NOTES TO THE
FINANCIAL STATEMENTS
Unrecognised items (continued)
NOTE 23: COMMITMENTS
(a) Gold delivery commitments
Forward sale contracts are accounted for as sale contracts with revenue recognised once gold has been physically delivered. The physical gold
delivery contracts are considered own use contracts and therefore do not fall within the scope of AASB 9 Financial Instruments: Recognition and
Measurement. As a result, no derivatives are required to be recognised. Forward gold sale contract delivery commitments are shown below:
Gold delivery commitments
As at 30 June 2020
Within one year
Between one and five years
Total
As at 30 June 2019
Within one year
Between one and five years
Total
(b) Capital expenditure commitments
Capital expenditure contracted but not provided for in the financial statements:
Within one year
Total capital expenditure commitments
(c) Operating lease commitments
Future minimum rentals payable on non-cancellable operating leases due:
Within one year
Between one and five years
Total operating lease commitments
Gold for
physical
delivery
Oz
125,850
121,500
247,350
138,800
102,100
240,900
Contracted
sales price
A$/oz
Committed
gold sales
value
$’000
$2,046
$2,227
$2,135
$1,806
$1,873
$1,834
257,456
270,525
527,981
250,605
191,193
441,798
2020
$’000
3,575
3,575
2020
$’000
-
-
-
2019
$’000
1,509
1,509
2019
$’000
819
524
1,343
(d) Minimum exploration and evaluation commitments
In order to maintain current rights of tenure to exploration tenements, the group is required to perform minimum exploration work to meet
minimum expenditure requirements. These obligations are subject to renegotiation and may be farmed out or relinquished. These obligations are
not provided for in the financial statements.
Within one year
Between one and five years
Due later than five years
Total minimum exploration and evaluation commitments
2020
$’000
5,077
17,572
21,580
44,229
2019
$’000
5,171
17,254
22,881
45,306
127
Annual Report 2020 NOTES TO THE
FINANCIAL STATEMENTS
Other information
NOTE 24: EVENTS OCCURRING AFTER THE REPORTING PERIOD
No matters or circumstances have arisen since 30 June 2020 that have significantly affected, or may significantly affect:
(a) The group’s operations in future financial years,
(b) The results of operations in future financial years, or
(c) The group’s state of affairs in future financial years.
NOTE 25: RELATED PARTY TRANSACTIONS
Transactions with related parties are on normal commercial terms and at conditions no more favourable than those available to other parties unless
otherwise stated.
Key management personnel compensation
Short-term employee benefits1
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
Total key management personnel compensation
1.
Short-term benefits as per Corporations Regulation 2M.3.03(1) Item 6.
Detailed remuneration disclosures are provided in the Remuneration Report.
(a) Subsidiaries
Interests in subsidiaries are set out in Note 21.
2020
$’000
3,321,883
148,422
45,560
-
1,014,048
4,529,913
2019
$’000
3,108,089
172,749
(64,650)
299,583
268,148
3,783,919
(b) Transactions with other related parties
There were no other transactions with related parties during the year. There were no amounts receivable from or payable to Directors and their
related entities at reporting date.
NOTE 26: SHARE BASED PAYMENTS
(a) Options
In November 2015 3,000,000 options over the ordinary fully paid shares in Ramelius Resources Limited were issued as approved by the
shareholders at the 2015 Annual General Meeting.
The table set out below summarises the options granted:
2020
2019
Avg ex price
per option
$0.20
$0.20
-
-
Number
of options
1,500,000
(1,500,000)
-
-
Avg ex price
per option
$0.20
$0.20
$0.20
$0.20
Number
of options
3,000,000
(1,500,000)
1,500,000
1,500,000
As at 1 July
Options exercised
As at 30 June
Vested and exercisable at 30 June
128
Ramelius Resources
NOTES TO THE
FINANCIAL STATEMENTS
Other information (continued)
NOTE 26: SHARE BASED PAYMENTS (continued)
Share options outstanding at the end of the year have the following expiry dates and exercise prices:
Grant date
26 November 2015
20 November 2015
Total
Expiry date
11 June 2019
11 June 2020
Exercise price
$0.20
$0.20
Weighted average remaining contractual life of options outstanding at the end of the year
There were no options granted during the years ended 30 June 2020 and 30 June 2019.
Share options
30 June 2020
Share options
30 June 2019
-
-
-
-
-
1,500,000
1,500,000
0.95 years
(b) Performance rights
Under the Performance Rights Plan, which was approved by shareholders at the 2016 Annual General Meeting, eligible employees are granted
performance rights (each being an entitlement to an ordinary fully paid share) subject to the satisfaction of vesting conditions and on the terms and
conditions as determined by the Board. Performance rights are issued for no consideration and have a nil exercise price.
The amount of performance rights that vest depends on Ramelius’ total return to shareholders (TSR), including share price growth, dividends and
capital returns, and ranking within a peer group. Once vested performance rights remain exercisable for a period of seven years.
Performance rights issued under the plan carry no voting or dividend rights.
The table set out below summarises the performance rights granted:
As at 1 July
Performance rights forfeited
Performance rights lapsed
Performance rights granted
Performance rights exercised
As at 30 June
Vested and exercisable at 30 June
2020
Performance rights
2019
Performance rights
10,075,033
(618,601)
-
3,684,003
(1,377,522)
11,762,913
1,224,625
6,900,914
(422,645)
(143,019)
3,825,125
(85,342)
10,075,033
1,831,778
The fair value at grant date is independently determined using a Monte Carlo Simulations pricing model that takes into account the exercise price,
the term of the performance right, the share price at grant date, expected price volatility of the underlying share and the risk-free rate for the term
of the performance right. The expected price volatility is based on historic volatility (based on the remaining life of the performance right). Model
inputs for performance rights granted during the year are as follows:
Metric
Exercise price
Grant date
Life
Share price at grant date
Expected price volatility
Risk free rate
9 Oct 2019
$nil
9 Oct 2019
2.7 years
$1.39
55%
0.60%
Performance rights granted
29 Nov 2019
29 Nov 2019
$nil
29 Nov 2019
0.6 years
$1.02
54%
0.76%
$nil
29 Nov 2019
2.6 years
$1.02
54%
0.63%
129
Annual Report 2020 NOTES TO THE
FINANCIAL STATEMENTS
Other information (continued)
NOTE 26: SHARE BASED PAYMENTS (continued)
Performance rights outstanding at the end of the year have the following expiry date:
Grant date
23 November 2016
23 November 2016
23 November 2016
22 December 2016
1 July 2017
31 July 2017
3 October 2017
5 September 2018
29 November 2018
9 October 2019
22 November 2019
22 November 2019
Total
Expiry date
1 July 2024
1 July 2025
1 July 2026
11 June 2026
1 July 2027
1 July 2027
1 July 2027
1 July 2028
1 July 2028
1 July 2029
1 July 2027
1 July 2029
Performance rights
30 June 2020
Performance rights
30 June 2019
202,276
213,881
308,468
500,000
2,342,388
464,445
580,500
2,437,039
1,156,469
2,590,422
322,342
644,683
11,762,913
701,688
630,090
804,081
500,000
2,635,721
464,445
580,500
2,437,039
1,321,469
-
-
-
10,075,033
Weighted average remaining contractual life of performance rights outstanding
at the end of the year
7.70 years
7.92 years
(c) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefits expense were as follows:
Performance rights
Total share-based payment expense
2020
$’000
2,130
2,130
2019
$’000
651
651
(d) Recognition and measurement
The group provides benefits to employees (including the Managing Director / Chief Executive Officer) in the form of share-based compensation,
whereby employees render services in exchange for shares or options and/or rights over shares (equity-settled transactions).
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at
which they are granted. The group issues share-based remuneration in accordance with the employee share acquisition plan, the performance rights
plan or as approved by the Board as follows:
(i) Employee share acquisition plan
The group operates an Employee Share Acquisition Plan where employees may be issued shares and/or options. Fair value of the equity to
which employees become entitled is measured at grant date and recognised as an employee benefits expense over the vesting period with a
corresponding increase in equity. Fair value of shares issued is determined with reference to the latest ASX share price. Options are valued using an
appropriate valuation technique which takes vesting conditions into account.
(ii) Performance rights plan
The group has a Performance Rights Plan where key management personnel may be provided with rights to shares in Ramelius. Fair values of rights
issued are recognised as an employee benefits expense over the relevant service period, with a corresponding increase in equity. Fair value of rights
are measured at effective grant date and recognised over the vesting period during which key management personnel become entitled to the rights.
There are a number of different methodologies that are appropriate to use in valuing rights. Fair value of rights granted is measured using the most
appropriate method in the circumstances, taking into consideration the terms and conditions upon which the rights were issued.
130
Ramelius Resources NOTES TO THE
FINANCIAL STATEMENTS
Other information (continued)
NOTE 26: SHARE BASED PAYMENTS (continued)
(iii) Other long-term incentives
The Board may at its discretion provide share rights either to recruit or as a long-term retention incentive to key executives and employees.
The fair value of options and/or rights granted is recognised as an employee benefits expense with a corresponding increase in equity. The total
amount to be expensed is determined by reference to the fair value of the options and/or rights granted, which includes any market performance
conditions and the impact of any non-vesting conditions but excludes the impact of any service and non-market performance vesting conditions.
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised
over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the
entity revises its estimates of the number of options and/or rights that are expected to vest based on the non-market vesting conditions. It
recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
Upon exercise of the rights, the balance of the Share-Based Payments Reserve relating to those rights remains in the share-based payments reserve
until it is transferred to retained earnings.
NOTE 27: REMUNERATION OF AUDITORS
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and
non-related audit firms:
Deloitte Touche Tohmatsu
Audit or review of financial reports:
- Group
Other assurance and agreed upon procedures under other legislation or contractual arrangements
Other services:
- Other
Total remuneration of Deloitte Touche Tohmatsu
NOTE 28: EARNINGS PER SHARE
(a) Basic earnings per share
Basic earnings per share attributable to the ordinary equity holders of the company
(b) Diluted earnings per share
Diluted earnings per share attributable to the ordinary equity holders of the company
(c) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in calculating
basic earnings per share
Adjustments for calculation of diluted earnings per share:
Share rights and options
Weighted average number of ordinary shares used as the denominator in calculating
diluted earnings per share
2020
$’000
156,175
-
-
156,175
2019
$’000
105,000
6,250
13,200
124,450
2020
cents
2019
cents
16.43
16.13
3.74
3.67
2020
Number
2019
Number
690,240,811
12,922,406
703,163,217
584,112,265
11,448,559
595,560,824
131
Annual Report 2020 NOTES TO THE
FINANCIAL STATEMENTS
Other information (continued)
NOTE 28: EARNINGS PER SHARE (continued)
(d) Calculation of earnings per share
Basic earnings per share is calculated by dividing:
-
-
the profit attributable to owners of the company, adjusted to exclude costs of servicing equity other than ordinary shares,
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares
issued during the year.
Diluted earnings per share adjusts the figures used in determining basic earnings per share to take into account the:
- after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares,
-
weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential
ordinary shares.
(e) Earnings used in the calculation of earnings per share
Both the basic and diluted earnings per share have been calculated using the profit after tax as the numerator.
(f) Classification of securities
All ordinary shares have been included in basic earnings per share.
(g) Classification of securities as potential ordinary shares
Rights to shares granted to executives and senior managers are included in the calculation of diluted earnings per share and assume all outstanding
rights will vest. Rights are included in the calculation of diluted earnings per share to the extent they are dilutive. Options have been included in
determining diluted earnings per share to the extent that they are in the money (i.e. not antidilutive). Rights and options are not included in basic
earnings per share.
NOTE 29: ASSETS PLEDGED AS SECURITY
The carrying amounts of assets pledged as security for current borrowings are:
Current
Floating charge
Cash and cash equivalents
Receivables
Inventories
Other assets
Total current assets pledged as security
Non-current
Floating charge
Financial assets
Property, plant and equipment
Development assets
Exploration and development assets
Total non-current assets pledged as security
Total assets pledged as security
132
2020
$’000
164,951
3,221
97,553
4,475
270,200
624
78,058
208,268
26,038
312,988
583,188
2019
$’000
-
-
-
-
-
-
-
-
-
-
-
Ramelius Resources
NOTES TO THE
FINANCIAL STATEMENTS
Other information (continued)
NOTE 30: DEED OF CROSS GUARANTEE
Pursuant to ASIC Instrument 2016/785, wholly-owned controlled entities Mt Magnet Gold Pty Ltd (formerly Mt Magnet Gold NL), RMSXG Pty
Ltd, Ramelius Operations Pty Ltd, Edna May Operations Pty Ltd, Marda Operations Pty Ltd (formerly Black Oak Minerals Limited), Explaurum
Operations Pty Ltd, and Ninghan Exploration Pty Ltd are relieved from the Corporations Act 2001 requirements for preparation, audit and
lodgement of its financial reports and Directors’ Report.
It is a condition of the Class Order that the Company and each of its eligible controlled entities enter into a Deed of Cross Guarantee.
In December 2011, Ramelius Resources Limited, RMSXG Pty Ltd and Mt Magnet Gold Pty Ltd (the Closed group) entered into a Deed of Cross
Guarantee. In March 2018 Edna May Operations and Ramelius Operations Pty Ltd joined the Closed group by entering the Deed of Cross
Guarantee by way of an Assumption Deed. In April 2019 Explaurum Limited, Explaurum Operations Pty Ltd, and Ninghan Exploration Pty Ltd
joined the Closed group by entering the Deed of Cross Guarantee by way of an Assumption Deed.
The effect of the Deed is that Ramelius Resources Limited has guaranteed to pay any deficiency in the event of winding up of the abovementioned
controlled entities under certain provisions of the Corporations Act 2001. Mt Magnet Gold Pty Ltd, RMSXG Pty Ltd, Ramelius Operations Pty Ltd,
Edna May Operations Pty Ltd, Marda Operations Pty Ltd, Explaurum Limited, Explaurum Operations Pty Ltd, and Ninghan Exploration Pty Ltd
have also given a similar guarantee in the event that Ramelius Resources Limited is wound up.
Spectrum Metals Limited is required to prepare an audited financial report for the year ended 30 June 2020 as it was a disclosing entity during the
year ended 30 June 2020.
A Consolidated Statement of Comprehensive Income and Consolidated Balance sheet comprising the Closed group which are parties to the Deed
of Cross Guarantee, after eliminating all transactions between parties to the Deed is set out below.
Statement of comprehensive income
Sales revenue
Cost of production
Gross profit
Other expenses
Other income
Interest income
Finance costs
Profit before income tax
Income tax expense
Profit for the year from continuing operations
Other comprehensive income
Net change in fair value of available-for-sale assets
Other comprehensive income for the year, net of tax
2020
$’000
460,486
(289,358)
171,128
(18,021)
1,346
996
(4,025)
151,424
(36,070)
115,352
655
655
2019
$’000
352,770
(309,161)
43,609
(14,961)
2,125
1,886
(2,193)
30,466
(8,579)
21,887
(50)
(50)
Total comprehensive income for the year
116,009
21,837
133
Annual Report 2020 NOTES TO THE
FINANCIAL STATEMENTS
Other information (continued)
NOTE 30: DEED OF CROSS GUARANTEE (continued)
Balance sheet
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Total current assets
Non-current assets
Other receivables
Other assets
Available-for-sale financial assets
Property, plant and equipment
Development assets
Exploration and evaluation expenditure
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Lease liability
Contingent consideration
Tax payable
Provisions
Current liabilities
Non-current liabilities
Lease liability
Contingent consideration
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Retained earnings
Total equity
134
2020
$’000
164,951
3,221
97,553
4,475
270,200
2,745
171,309
624
78,057
208,268
26,038
487,041
757,241
82,126
23,475
16,643
6,262
21,272
9,200
158,978
13,846
6,923
21,061
38,720
80,550
239,528
517,713
370,781
(34,657)
181,589
517,713
2019
$’000
95,815
6,774
41,067
8,629
152,285
1,488
1,488
101
43,823
99,430
98,488
244,818
397,103
44,926
-
-
-
-
6,852
51,778
45,987
12,121
7,741
65,849
117,627
279,476
214,218
(7,642)
72,900
279,476
Ramelius Resources NOTES TO THE
FINANCIAL STATEMENTS
Other information (continued)
NOTE 31: PARENT ENTITY INFORMATION
The financial information of the parent entity, Ramelius Resources Limited, has been prepared on the same basis as the consolidated financial
statements, other than investments in controlled entities which were carried at cost less impairment.
(a) Summary financial information
Financial statement for the parent entity show the following aggregate amounts:
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
- Share-based payment reserve
- Other reserves
Retained losses
Total equity
(b) Income statement
Profit / (loss) after income tax
Total comprehensive income / (loss)
(c) Commitments
(i) Operating lease commitments
Future minimum rentals payables on non-cancellable leases due:
Within one year
Later than one year but not later than five years
Total operating lease commitments
2020
$’000
161,546
499,027
(34,709)
(27,772)
471,255
370,781
3,288
(317)
97,503
471,255
122,476
122,410
-
-
-
2019
$’000
84,055
214,596
(12,735)
(16,701)
197,895
214,218
2,032
(383)
(17,972)
197,895
(25,104)
(25,154)
351
280
631
(ii) Minimum exploration and evaluation commitments
In order to maintain current rights of tenure to exploration tenements, Ramelius is required to perform minimum exploration work to meet
minimum expenditure requirements. These obligations are subject to renegotiation and may be farmed out or relinquished. These obligations are
not provided for in the parent entity financial statements.
Within one year
Later than one year but not later than five years
Later than five years
Total minimum exploration and evaluation commitments
2020
$’000
511
1,392
1,404
3,307
2019
$’000
698
1,748
1,742
4,188
135
Annual Report 2020 NOTES TO THE
FINANCIAL STATEMENTS
Other information (continued)
NOTE 31: PARENT ENTITY INFORMATION (continued)
(d) Contingent liabilities
The Directors are of the opinion that the recognition of a provision is not required in respect of the following matters, as it is not probable that a
future sacrifice of economic benefits will be required, or the amount is not capable of reliable measurement.
(i) Bank guarantees
Ramelius has negotiated a number of bank guarantees in favour of various government authorities and service providers. The total nominal amount
of these guarantees at the reporting date is $120,145 (2019: $370,145). These bank guarantees are fully secured by cash on term deposit.
(e) Guarantees in relation to debts of subsidiaries
In December 2011, Ramelius Resources Limited, RMSXG Pty Ltd and Mt Magnet Gold Pty Ltd (the Closed group) entered into a Deed of Cross
Guarantee. In March 2018 Edna May Operations and Ramelius Operations Pty Ltd joined the Closed group by entering the Deed of Cross
Guarantee by way of an Assumption Deed. In April 2019 Explaurum Limited, Explaurum Operations Pty Ltd, and Ninghan Exploration Pty Ltd
joined the Closed group by entering the Deed of Cross Guarantee by way of an Assumption Deed.
The effect of the Deed is that Ramelius has guaranteed to pay any deficiency in the event of winding up of the abovementioned subsidiaries under
certain provisions of the Corporations Act 2001. The subsidiaries have also given a similar guarantee in the event that Ramelius is wound up.
NOTE 32: ACCOUNTING POLICIES
(a) New standards and interpretations not yet adopted
The group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are
relevant to its operations and effective for an accounting period that begins on or after 1 July 2019.
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2020 reporting periods and
have not been early adopted by the group. These accounting standards and interpretations are detailed below. The group has assessed that these
new standards and interpretations will not have a material impact on the financial measurement, reporting, nor disclosures of the group’s
financial report.
AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material
These amendments are intended to address concerns that the wording in the definition of ‘material’ was different in the Conceptual
Framework for Financial Reporting, AASB 101 Presentation of Financial Statements and AASB 108 Accounting Policies, Changes in Accounting Estimates
and Errors.
The amendments address these concerns by:
• Replacing the term ‘could influence’ with ‘could reasonably be expected to influence’.
• Including the concept of ‘obscuring information’ alongside the concepts of ‘omitting’ and ‘misstating’ information in the definition of material.
• Clarifying that the users to which the definition refers are the primary users of general purpose financial statements referred to in the
Conceptual Framework.
• Aligning the definition of material across IFRS Standards and other publications.
AASB 2019-5 Amendments to Australian Accounting Standards – Disclosure of the Effect of New IFRS Standards Not Yet Issued in Australia
Amends AASB 1054 Australian Additional Disclosures to add a requirement for entities that intend to be compliant with IFRS standards
to disclose the information required by AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors (specifically paragraphs
30 and 31) for the potential effect of each IFRS pronouncement that has not yet been issued by the AASB.
136
Ramelius Resources
DIRECTORS’
DECLARATION
In the Directors’ opinion:
(a) the financial statements and notes set out on pages 83 to 136 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020 and of its performance for the financial year
ended on that date, and
(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable, and
(c) at the date of this declaration, there are reasonable grounds to believe that the members of the extended Closed group identified in Note
30 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee
described in Note 30.
The ‘About this report’ section of the notes to the financial statements confirms that the financial statements also comply with International
Financial Reporting Standards as issued by the International Accounting Standards Board.
The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A of the
Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
K J Lines
Chairman
Perth
24 August 2020
137
Annual Report 2020
INDEPENDENT AUDITOR’S
REPORT
to the members of Ramelius Resources Limited
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
Independent Auditor’s Report to the members of
Ramelius Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Ramelius Resources Limited (the “Company”) and its subsidiaries (the
“Group”) which comprises the consolidated balance sheet as at 30 June 2020, the consolidated income
statement, the consolidated statement of comprehensive income, the consolidated statement of changes in
equity and the consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies and other explanatory information, and the
directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities
in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report for the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Liability limited by a scheme approved under Professional Standards Legislation
Member of Deloitte Asia Pacific Limited and the Deloitte Network.
138
Ramelius Resources
INDEPENDENT AUDITOR’S
REPORT
to the members of Ramelius Resources Limited
Key Audit Matter
How the scope of our audit responded to the Key Audit Matter
Accounting for Development Assets
As at 30 June 2020, the carrying value of
development assets amounts to $208.3
million as disclosed in Note 9.
During the year the Group incurred
$107.5 million of capital expenditure
related to mine development assets and
recognised related amortisation expenses
of $77.5 million.
The accounting for both underground and
open pit operations includes a number of
estimates and judgements, including:
•
•
the allocation of mining costs
between operating and capital
expenditure; and
the determination of the units of
production used to amortise
mine properties.
For underground operations, a key driver
of the allocation of costs between
operating and capital expenditure is the
physical mining data associated with the
different underground mining activities
including the development of declines,
lateral and vertical development, as well
as capital non-sustaining costs.
The allocation of costs for open pit
operations is based on the ratio between
actual ore and waste mined, compared
with the ratio of expected ore and waste
mined over the life of the respective open
pit.
In respect of the allocation of mining costs our procedures
included, but were not limited to:
•
•
obtaining an understanding of the key controls
management has in place in relation to the capitalisation
of both underground and open pit mining costs and the
production of physical mining data; and
on a sample basis, testing the mining costs through
agreeing to source data.
In respect of the allocation of mining costs for underground
operations, our procedures included, but were not limited to:
•
assessing the appropriateness of the allocation of costs
between operating and capital expenditure based on the
nature of the underlying activity, and recalculating the
allocation based on the underlying physical data.
In respect to the deferred stripping costs our procedures included,
but were not limited to:
•
•
•
•
assessing the accounting policy against the appropriate
accounting standards, including AASB 102 Inventories and
AASB Interpretation 20 Stripping Costs in the Production
Phase of a Surface Mine;
assessing the accuracy of the expected stripping ratios by
agreeing key inputs to Reserves and Resources reports;
assessing the accuracy of the actual stripping ratios by
agreeing key inputs to production reports and stockpile
surveys; and
assessing the completeness and accuracy of costs
associated with stripping activities.
In respect of the Group’s unit of production amortisation
calculations our procedures included, but were not limited to:
•
•
•
obtaining an understanding of the key controls
management has in place in relation to the calculation of
the unit of production amortisation rate;
testing the mathematical accuracy of the rates applied;
and
agreeing the inputs to source documentation, including:
-
the allocation of contained ounces to the specific
mine development assets;
the contained ounces to the applicable reserves
statement; and
the reasonableness of the life of mine plan for the
development asset.
-
-
We also assessed the appropriateness of the disclosures included
in Note 9 to the financial statements.
139
Annual Report 2020
INDEPENDENT AUDITOR’S
REPORT
to the members of Ramelius Resources Limited
Key Audit Matter
How the scope of our audit responded to the Key Audit Matter
Recognition of Tax Losses
As disclosed in Note 3(d), the Group
recognised $10.1 million of deferred tax
assets during the year ended 30 June 2020
relating to historic tax losses associated
with Explaurum Operations Pty Limited
(“Explaurum”), of which $3.0 million was
utilised during the year, leaving $7.1
million remaining unused as at 30 June
2020.
The recognition of deferred tax assets
relating to historic tax losses involves
significant judgement associated with:
•
•
the availability of these historic
losses to the Group; and
the likelihood of the utilisation of
such tax losses, which amongst
other things requires the
generation of sufficient future
taxable profit by the Group to be
probable.
Our procedures, completed in conjunction with our internal tax
experts included:
•
•
•
•
obtaining an understanding of the key controls
management has in place to assess the availability and
recoverability of historic tax losses;
reviewing the advice received from managements
external tax expert as to the availability of historic
Explaurum tax losses to the Group;
assessing the independence, competence and objectivity
of experts used by management;
evaluating management’s assessment as to whether it is
probable that sufficient taxable profit will be generated
by the Group to utilise historic tax losses relating to
Explaurum. These procedures included:
i) assessing the reasonableness of the available fraction
applied, which limits the annual rate at which transferred
losses can be utilised by the Group;
ii) assessing the forecast taxable profit for reasonableness
including evaluating the future gold price assumptions for
reasonableness, comparing the forecast production
profiles by mine to related to life of mine models and
resource and reserve statements, and comparing forecast
operating costs to historical actual results and feasibility
studies.
We also assessed the appropriateness of the disclosures included
in Note 3(d) to the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2020, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If,
based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
140
Ramelius Resources
INDEPENDENT AUDITOR’S
REPORT
to the members of Ramelius Resources Limited
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of
the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Group or to
cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as
intentional omissions,
involve collusion,
fraud may
misrepresentations, or the override of internal control.
forgery,
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the financial report.
We are responsible for the direction, supervision and performance of the Group’s audit. We
remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
141
Annual Report 2020
INDEPENDENT AUDITOR’S
REPORT
to the members of Ramelius Resources Limited
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 70 to 79 of the Directors’ Report for
the year ended 30 June 2020.
In our opinion, the Remuneration Report of Ramelius Resources Limited, for the year ended 30 June
2020, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
David Newman
Partner
Chartered Accountants
Perth, 24 August 2020
142
Ramelius Resources
SHAREHOLDER
INFORMATION
Additional Information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in this report is set out
below.
Shareholdings as at 12 October 2020
Substantial shareholders
The number of shares held by substantial shareholders and their associates as disclosed in substantial holding notices given to the Company are set
out below:
Substantial shareholder
Van Eck Associates Corporation
Ruffer LLP
Vanguard Group
Voting Rights
Number of fully paid ordinary shares held
78,149,819
54,920,903
42,747,141
Fully paid ordinary shares
Other than voting exclusions as required by the Corporations Act 2001 and subject to any rights or restrictions attached to any class of shares, at a
meeting of members, on a show of hands, each member present (in person, by proxy, attorney or representative) has one vote and on a poll, each
member present (in person, by proxy, attorney or representative) has one vote for each fully paid share they hold.
Options and Performance Rights
There are no options on issue by the Company.
Details of performance rights on issue by the Company as at 12 October 2020 are as follows:
Expiry date
01/07/2024*
01/07/2025*
11/06/2026*
01/07/2026*
01/07/2027*
01/07/2028#
01/07/2029#
Exercise price Number of Performance Rights
Nil
Nil
Nil
Nil
Nil
Nil
Nil
101,138
129,593
500,000
241,043
1,095,275
3,758,508
3,361,661
Performance rights holders will be entitled on payment of the exercise price shown above to be allotted one ordinary fully paid share in the
Company for each performance right exercised.
* These performance rights are exercisable in whole or in part at any time until the expiry date. Any performance rights not exercised before expiry will lapse.
# These performance rights are subject to vesting conditions and once vested are exercisable in whole or in part at any time until the expiry date. Any vested performance
rights not exercised before expiry will lapse.
143
Annual Report 2020 SHAREHOLDER
INFORMATION (continued)
Distribution of equity security holders
Ordinary shares
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
Rounding
Total
Unmarketable parcels
Range
Total Holders
2,358
3,262
1,564
2,679
413
10,276
Units
1,081,749
9,356,242
12,677,564
86,722,073
698,984,083
808,821,711
Minimum Parcel Size
Holders
Minimum $ 500.00 parcel at $ 2.200 per unit
228
730
Units
0.13
1.16
1.57
10.72
86.42
0.00
100.00
Units
34,180
Performance Rights
Holders of
Unquoted
1 July 2024
Performance
Rights
Holders of
Unquoted
1 July 2025
Performance
Rights
Holders of
Unquoted
11 June 2026
Performance
Rights
Holders of
Unquoted
1 July 2026
Performance
Rights
Holders of
Unquoted
1 July 2027
Performance
Rights
Holders of
Unquoted
1 July 2028
Performance
Rights
Holders of
Unquoted
1 July 2029
Performance
Rights
-
-
-
-
1
1
-
-
-
2
-
2
-
-
-
1
1
-
-
-
2
1
3
-
-
-
-
5
5
-
-
-
12
13
25
-
-
-
17
10
27
Category
1 - 1000
1001 - 5,000
5001 – 10,000
10,001 – 100,000
100,001 and over
Total security holders
On market buy-back
There is no current on-market buy-back.
144
Ramelius Resources SHAREHOLDER
INFORMATION (continued)
Twenty largest shareholders
The name of the 20 largest holders of fully paid ordinary shares constituting a class of quoted equity securities on the Australian Securities
Exchange Limited including the number and percentage held by those holders at 12 October 2020 are as follows:
Rank Name
Units
% Units
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
STRAMIG HOLDINGS PTY LTD
BNP PARIBAS NOMS PTY LTD
WEST TRADE ENTERPRISES PTY LTD
MR RICHARD ARTHUR LOCKWOOD
PATINA RESOURCES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
WARBONT NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA
CITICORP NOMINEES PTY LIMITED
MRS AMANDA JANE CROSER
NATIONAL NOMINEES LIMITED
MR LEONID CHARUCKYJ
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MS BO XU
MARICH NOMINEES PTY LTD
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Total top 20 holders of ordinary fully paid shares
Total remaining holders balance
Unquoted and restricted equity securities
Fully Paid Ordinary Shares
There are no unquoted restricted fully paid ordinary shares on issue.
323,338,274
109,878,277
59,737,941
26,798,973
10,775,044
9,500,000
7,114,422
5,515,333
4,500,000
3,840,909
3,378,333
3,285,419
2,230,528
2,200,284
2,166,667
1,993,620
1,926,674
1,641,590
1,550,000
1,543,000
582,915,288
225,906,423
39.98
13.58
7.39
3.31
1.33
1.17
0.88
0.68
0.56
0.47
0.42
0.41
0.28
0.27
0.27
0.25
0.24
0.20
0.19
0.19
72.07
27.93
Performance Rights
Details of options and performance rights on issue as at 12 October 2020 which are unquoted restricted securities held by employees as long-
term incentives are as follows.
Date until securities are
restricted
01/07/2024*
01/07/2025*
11/06/2026*
01/07/2026*
01/07/2027*
01/07/2028**
01/07/2029**
Number of
unquoted
securities on issue Number of holders
Vesting Date
Exercise price
Exercisable until
101,138
129,593
500,000
241,043
1,095,275
3,758,508
3,361,661
1
2
1
3
5
25
27
-
-
-
-
-
01/07/2021
01/07/2022
Nil
Nil
Nil
Nil
Nil
Nil
Nil
01/07/2024
01/07/2025
11/06/2026
01/07/2026
01/07/2027
01/07/2028
01/07/2029
* These securities are vested performance rights which may not be transferred or used as collateral.
** These securities are unvested performance rights exercisable when vested which may not be transferred or used as collateral
Annual Report 2020 145
R
A
M
E
L
I
U
S
R
E
S
O
U
R
C
E
S
A
N
N
U
A
L
R
E
P
O
R
T
2
0
2
0
RAMELIUS RESOURCES LIMITED
ACN 001 717 540
ABN 51 001 717 540
Level 1, 130 Royal Street
EAST PERTH WA 6004
PO Box 6070 EAST PERTH WA 6892
Telephone: (08) 9202 1127
Email: ramelius@rameliusresources.com.au
Website: www.rameliusresources.com.au