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Annual Report 2021

Plain-text annual report

CONTINUED GROWTH REFLECTS OUR STRATEGY IN ACTION CORPORATE DIRECTORY Directors Bob Vassie – FAusIMM, GAICD, B.MinTech (Hons) Mining Independent Non-Executive Chair Mark Zeptner – BEng (Hons) Mining, MAusIMM, MAICD Managing Director and Chief Executive Officer Michael Bohm – BAppSc (Mining Engineering), MAusIMM, MAICD Independent Non-Executive Director David Southam – B. Com, CPA, MAICD Independent Non-Executive Director Natalia Streltsova – MSc, PhD (Chem Eng), GAICD Independent Non-Executive Director Company Secretary Richard Jones – BA (Hons), LLB Chief Financial Officer Tim Manners – BBus (Accounting), FCA, AGIA, MAICD Chief Operating Officer Duncan Coutts – BEng (Hons) Mining, MAusIMM General Manager – Exploration Principal Registered Office Share Registry Auditor Peter Ruzicka – MSc (Ore Deposit Geology), BAppSc (Geology), BSc, 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) 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 RAMELIUS RESOURCES ANNUAL REPORT 2021 1 TABLE OF CONTENTS Key Operational Highlights for the Year Key Financial Highlights for the Year Corporate Strategy Chair’s Report Managing Director’s Report Review of Operations Overview Mt Magnet Edna May Development and Exploration Projects Resources and Reserves Company Summary Mineral Resources Ore Reserves Forward Looking Statement Competent Persons Sustainability Report 2021 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 04 06 08 10 12 13 15 18 20 23 23 24 26 27 27 28 30 32 39 43 48 52 57 60 62 83 85 85 86 87 88 89 132 133 137 2 RAMELIUS RESOURCES ANNUAL REPORT 2021 KEY OPERATIONAL HIGHLIGHTS FOR THE YEAR Commencement of mining at the Tampia Gold Mine Negotiations on the compensation payments with landowners and with the 10% minority JV owner were finalised in January 2021. Ramelius agreed to purchase the remaining 10% minority interest in the Tampia Gold Mine JV for $3.0 million cash, 5 million shares in Ramelius, and a 2% royalty on any gold production above 185,539 ounces from the Tampia Gold Mine (Tampia). At the same time, Ramelius agreed to purchase the primary freehold land associated with Tampia for $6.0 million. These agreements allowed for immediate access to the Tampia area for the commencement of site preparations. Following grade control drilling, mining contractor mobilisation, and site establishment, material movement commenced in April 2021 with first ore mined in June 2021. Haulage to, and processing at, the Edna May processing plant commenced in July 2021. Commencement of development at the Penny Gold Mine On 9 November 2020 Ramelius released the results of the Penny Feasibility Study and advised the Board’s approval to commence project development. As a result of the compelling financial outcomes from the Penny Feasibility Study, the Board also approved a decision to mine. In the March 2021 quarter, works commenced on regulatory approvals, contract negotiations, and the purchase of long lead items. All key approvals were received in the June quarter and accordingly camp construction commenced and the open pit mining and catering contracts were awarded. Open pit mining commenced in the September 2021 quarter before underground development commences in the second half of the 2022 financial year. In the coming year operations will focus on the development of the underground mine with only modest amounts of ore sourced from the Magenta open pit and the Penny West pit cutback. Gold Production & Guidance NEW RECORD FY21 Production 272,109oz @ AISC A$1,317/oz FY22 GUIDANCE 260,000- 300,000oz @ AISC A$1,425 - 1,525/oz MINERAL RESOURCES 5.4 Moz at 30 June 2021 ORE RESERVES 1.1 Moz at 30 June 2021 I S T H G L H G H I RAMELIUS RESOURCES ANNUAL REPORT 2021 Digger of the Year 2020 Ramelius was named the Digger of the Year at the 2020 Diggers and Dealers Conference in October after delivering a 420 per cent rise in net profit across our WA gold mines in FY20. @ AISC A$1,317/oz @ AISC A$1,425 - 1,525/oz at 30 June 2021 at 30 June 2021 RETURNS FOR SHAREHOLDERS Payout rate of 32% of total cash flows Returns A$75/oz produced in dividends Yield of 2.3%* * After tax and based on share price of $1.70 at 30 June 2021 3 Y E K COVID-19 Whilst the direct impact of COVID-19 has been minimal, border closures and lockdowns following outbreaks around Australia continue to have an impact on Ramelius operations, primarily through labour availability from interstate and overseas and the corresponding pressure this puts on wages within the mining industry. During the year Ramelius continued with its range of initiatives in response to COVID-19. Ramelius believes the measures that it has in place go beyond 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. Health management: proactive temperature testing and pre commute 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 flu like 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, 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 largely under control, management acknowledge that the situation can change rapidly and continues to diligently monitor, implement new restrictions as they are introduced and be in a position to respond quickly to the ongoing COVID-19 virus. 4 RAMELIUS RESOURCES ANNUAL REPORT 2021 KEY FINANCIAL HIGHLIGHTS FOR THE YEAR FY21 PRODUCTION HIGHLIGHTS 277,450 22 % on 2020 oz sold A$2,282 13 % on 2020 / realised price A$1,317 13 % on 2020 / AISC oz FY21 FINANCIAL HIGHLIGHTS $634.3M Revenue $341.0M EBITDA $126.8M NPAT $148.2M Underlying cash flow $234.0M Cash & gold on hand 2.5 cps Final dividend I S T H G L H G H I RAMELIUS RESOURCES ANNUAL REPORT 2021 5 FINANCIAL PERFORMANCE A$’000 Revenue EBITDA EBIT Statutory Net profit after Tax# Cash Flow from Operations Underlying Cash Flow* Group Cash Flow Basic Earnings per share (cents) Dividend per share (fully franked) Units A$’000 A$’000 A$’000 A$’000 A$’000 A$’000 A$’000 cps cps 2021 634,283 340,975 177,439 126,778 305,649 148,153 62,832 15.6 2.5 2020 460,574 256,025 152,512 113,415 236,031 83,659 69,855 16.4 2.0 Change% Y E K 38% 33% 1 % 12% 30% 77% (10%) (5%) 25% # Underlying NPAT is $126.4M after reversing $3.9M in a tax loss benefit and $3.5M in exploration write off (post tax) * Cash flows before borrowings, dividends, acquisitions, contingent consideration, and income tax CASHFLOW Underlying Cashflow (% of Revenue) 23% 18% 14% 10% 5% Dividend History 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 1.0 2.0 ) s p c ( d n e d i v i D 43.1 2.5 50.0 45.0 40.0 35.0 30.0 25.0 20.0 15.0 01.0 5.0 ) M $ ( n r u t e r e v i t a l u m u C FY17 FY18 FY19 FY20 FY21 FY19 FY20 FY21 REVENUE & EARNINGS Revenue (A$) 460.6 341.8 352.8 197.4 634.3 EBITDA (A$) 341.0 256.0 127.0 112.2 84.6 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 NPAT (A$) 126.8 Earnings Per Share (cps) 16.4 15.6 113.4 17.7 30.8 21.8 5.8 3.7 3.4 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 6 RAMELIUS RESOURCES ANNUAL REPORT 2021 CORPORATE STRATEGY OUR MISSION I S T H G L H G H I RAMELIUS RESOURCES ANNUAL REPORT 2021 7 Y E K OUR STRATEGIC PRIORITIES 1 Feed Existing Hubs 2 Acquire Third Hub 3 Ramp Up Greenfields 4 Grow Capability 5 Do the Essentials OUR VALUES We Empower our people We achieve Fit-for-Purpose outcomes We Deliver and do it safely We are Authentic Our culture is defined by a ‘fit-for-purpose’ and ‘can-do’ attitude 8 RAMELIUS RESOURCES ANNUAL REPORT 2021 CHAIR’S REPORT DEAR FELLOW SHAREHOLDERS, I am very pleased to introduce myself as the new Chair of your Company. It is a role I am privileged to take on and I look forward to continuing the good work of my immediate predecessors, Mike Bohm and Kevin Lines. As you would be aware, Mike took up the chairmanship in an acting capacity upon Kevin’s retirement in September 2020 after almost 12 years of service to the Company. I would like to thank both men for their efforts in expertly guiding the Company. When considering joining the Company last year, I was very impressed by Ramelius’ recent achievements. Average year- on-year production growth of 20% per year over five years is truly remarkable for a gold miner. The way in which the growth strategy has been executed, through very valuable organic growth at existing mines and well-timed, discerning inorganic growth from acquisitions, is equally impressive. Continued operational excellence has provided the mainstay for growth, with Ramelius recognised for its ability to run a ‘hub and spoke’ model – multiple underground and opencut mines, operated with our contracting partners, providing feed to our two processing plants at Mt Magnet and Edna May – very effectively. This has led to the company Ramelius is today: a significant midcap ASX200 gold producer with a strong balance sheet, multiple operations, strong exploration portfolio and the ability to grow further in a well-executed, valuable and sustainable way. Across all parts of the business, it is the people that have played a big part in this evolution and I am thrilled to now be part of that accomplished team. It was yet another strong year for Ramelius, with the Company reporting new records for production, revenue, EBITDA, net profit after tax, cash and bullion on hand and final dividend. We should not lose sight of the fact that these records were achieved at a time when the COVID-19 pandemic placed significant restrictions on the industry. While it is fair to say that the mining industry did very well in maintaining operations across the country, it is easy to overlook how much extra effort that took from our leaders, workforce and business partners and I would like to thank them for that relentless focus during the year. A particular highlight for me, early in my role as Chair, was to visit the Mt Magnet and Edna May operations, and witness mining commencing at our new operation at Tampia in the Wheatbelt of WA. The new mine came into production exactly as planned, and, on top of that, our new operation at Penny is well advanced. Again, this shows the team’s remarkable ability to deliver growth. As many of you will already know, there is a growing interest amongst stakeholders in the themes of sustainability and ESG (Environmental, Social and Governance). This extends to some institutional investors and investor associations requiring listed companies, especially those in the ASX200, to report to certain frameworks or standards. Last year the Board formed a ’ T R O P E R S R O T C E R D I I G N G A N A M & N A M R A H C I RAMELIUS RESOURCES ANNUAL REPORT 2021 9 Risk & Sustainability Committee led by Dr Natalia Streltsova to assist onour ESG journey, and our first Sustainability Report released during that period was an excellent start in addressing this area. This Annual Report contains our second Sustainability Report in which we provide an update on our performance but also lay out a pathway to reporting against global frameworks such as TCFD (Taskforce of Climate-Related Financial Disclosures). At Ramelius we value sustainability as a fundamental element of our licence to operate and seek to wholeheartedly embrace the notion so that we can continue to operate in a way in which the benefits to stakeholders far outweigh any impact from operations. levels and supply lines. The tightness of the skilled labour market has made the news recently and is exacerbated by the fact that resource industry is growing at a time when COVID-19 is causing disruption. We can only hope that the situation improves as vaccination levels rise and restrictions are eased. I wish all our shareholders all the best for this financial year and the COVID-19 challenges ahead. There is ample reason to be optimistic in Ramelius’ future. Looking forward, the new financial year is forecast to be strong again. We have provided production guidance of 260,000- 300,000oz, so even at the midpoint of guidance, we will set a new record. Bob Vassie Non-Executive Chair Ramelius Resources Ltd There are, however, several challenges that Ramelius and the broader industry face. While continuing to take action to mitigate the risk of COVID-19 affecting any of our operations, the Company will also have to deal with the impact of ongoing border restrictions on workforce 10 RAMELIUS RESOURCES ANNUAL REPORT 2021 MANAGING DIRECTOR’S REPORT DEAR FELLOW SHAREHOLDERS, This occasion always provides a useful opportunity for reflection and it is again with pride that I think back over Ramelius’ 2021 financial year. In my view, during the period, the Company only reinforced its standing as one of the most reliable mid-sized gold producers on the ASX and a worthy option for those investors seeking the elusive double of growth and capital returns. Continuing a recent trend, we again achieved record full-year gold production, with our Mt Magnet and Edna May production centres combining to deliver 272,109 ounces, an increase of 13% on the 2020 financial year. The record production result was driven by higher grades and higher mill throughput, particularly at Edna May, which returned to full capacity following the long-awaited development of the Greenfinch open pit and the ramp-up of our Marda operations. Coupled with a 13% increase in our average realised gold price to A$2,282 an ounce, record production translated into record full-year sales revenue of $634.3 million. Despite the rising cost pressures being felt in the WA gold industry, we were also able to post a record net profit after tax of $126.8 million, while our EBITDA margin – a key measure of operating profitability and cashflow – remained gold sector-leading at 54%. As a result of our strong operating and financial performance over recent years, the Company’s balance sheet has never looked so healthy. We finished the financial year with $234 million in net cash and bullion, up 26% on the previous 12-month period, and with about 70,000 ounces of gold in stockpiles and as gold-in-carbon. we retain ample financial capacity to fund exploration and project development and to act on acquisition opportunities as they arise. This two-pronged approach to investing in growth is one we have been pursuing for some time. The fact that it is serving us well was abundantly clear in August 2021 when we released our latest Mine Plan. The plan, which is based predominantly on Ore Reserves and Indicated Resources, outlined production of 1.84 million ounces of gold over seven years to financial year 2028 with a low-grade tail in financial years 2029 and 2030. For the current financial year, we have budgeted to spend $32 million on exploration and we continue to be very active on the business development side of things, assessing potential acquisitions that may help lift annual production beyond the 300,000 ounce a year mark. This financial year will also see the completion of pre-feasibility studies on the Stage 3 Open Pit at Edna May and the Galaxy and Morning Star underground projects at Mt Magnet, as well as progress the Eridanus underground scoping study at Mt Magnet, all of which will provide further clarity around future production. In line with our dividend policy, we declared a fully franked final dividend of 2.5 cents a share and, after making that payment, It was pleasing to see mining commence at one of our key growth projects, Tampia near Narembeen in WA’s Wheatbelt, ’ T R O P E R S R O T C E R D I I G N G A N A M & N A M R A H C I RAMELIUS RESOURCES ANNUAL REPORT 2021 11 provided since joining the Board. I also need to extend my gratitude to the Company’s other directors David Southam, Natalia Streltsova and Michael Bohm, who, like Bob, have greatly assisted in steering the ship in the right direction. While no one gets into this business for the accolades, it is always nice to have your hard work recognised. In that sense, being named Digger of the Year at the 2020 Diggers and Dealers Conference in Kalgoorlie in October was a pleasant surprise. No single person can take credit for an award like that; it really does belong to the team and on that note, I would like to thank all our employees, contractors and suppliers for their continued efforts and contributions to making the Company great. In conclusion, thank you for your support as shareholders. I hope you can see there is a bright future ahead. Mark Zeptner Managing Director Ramelius Resources Ltd on schedule in April 2021. Trucking of ore from the new mine to Edna May for processing also started as anticipated on 1 July 2021. Tampia’s importance in the Ramelius portfolio is underscored by the fact that this financial year it will be the second highest contributor to our production target behind Mt Magnet. The next cab off the rank from a growth perspective is the Penny Gold Mine, which was acquired through the takeover of Spectrum Metals last year and is progressing rapidly towards first production. Open pit mining at Penny commenced in the September 2021 quarter, while underground development is scheduled to start in the second half of this financial year. Ore from the project will be trucked approximately 150km north-west to Mt Magnet for processing, providing high-grade feed to supplement ore from our local operations there. At present, we are guiding for production of 260,000-300,000 ounces of gold at an all-in sustaining cost of A$1,425-1,525 an ounce for financial year 2022. Should we achieve the mid-point of this range, it would represent another record. This September marked a year since Ramelius’ inclusion in the S&P ASX200 index for the first time, a notable achievement that has brought with it increased investor recognition – and added scrutiny. We believe we are making solid progress on our journey to becoming a sustainable gold producer that delivers superior returns for all stakeholders. You will be able to judge that for yourself by looking through our second Sustainability Report, which has been issued with this Annual Report. Following the retirement of Kevin Lines as Chairman at the end of September 2020, a process commenced to identify a suitable replacement. On Christmas Eve, we announced that former St Barbara Managing Director and long-time Rio Tinto senior executive Bob Vassie had been appointed to the role. Bob is as passionate about the gold industry as anyone. From a personal point of view, I am grateful for the support and wise counsel he has 12 RAMELIUS RESOURCES ANNUAL REPORT 2021 REVIEW OF OPERATIONS Overview Mt Magnet Edna May Development and exploration projects 13 15 18 20 CONTINUED GROWTH REFLECTS OUR STRATEGY IN ACTION Figure 1: Ramelius’ operating locations WESTERN AUSTRALIA MT MAGNET Mt Magnet Geraldton PENNY Leinster VIVIEN Laverton Leonora MARDA Coolgardie Kalgoorlie 200km EDNA MAY Bullfinch Westonia Southern Cross PERTH Narembeen Norseman TAMPIA Bunbury Esperance Albany Ramelius Production Centres Mine / Development Projects Haulage Direction RAMELIUS RESOURCES ANNUAL REPORT 2021 13 W I E V E R I S N O T A R E P O F O Overview Ramelius is an established mid tier ASX 200 gold production and exploration company. Ramelius achieved record annual gold production for the financial year of 272,109 ounces and has produced over 1 million ounces over the last five financial years. Ramelius reported a 16% increase in earnings before interest and tax (EBIT) compared to the 2020 financial year. The reported EBIT for the 2021 financial year was $177.5 million (2020: $152.5 million). Despite a higher cost profile than the prior year due in part to the impact of COVID-19 and the consequential tightening of the labour market, this result has been achieved through increased production and the continued strength in the A$ gold price. In addition to the strong EBIT the operating cashflows also reported a significant increase of 29% to $305.6 million. Further details on the financial performance of the group for the 2021 financial year can be found in the financial review of this report. Production guidance for the 2022 financial year has been set at 260,000 – 300,000 ounces which, if the midpoint is achieved, will be another record year for Ramelius. Furthermore, a mine plan was released on 2 August 2021 which detailed a new 1.84 million ounce mine plan across nine years to 2030, which includes a low grade tail in the 2029 and 2030 financial years. This represents a 27% increase on the prior year’s mine plan. The record production in the 2021 year of 272,109 ounces from our Mt Magnet, Vivien, Edna May, and Marda gold mines was achieved at an All In Sustaining Cost (AISC) of A$1,317 per ounce (see map page 12). Sales for the year increased 22% to 277,450 ounces at an average realised gold price of A$2,282 generating a strong AISC margin of A$965 per ounce. Notwithstanding a 13% increase in the AISC per ounce from the prior year, a similar % increase in the realised gold price ensured the AISC margin remained high at 42%. 14 14 RAMELIUS RESOURCES ANNUAL REPORT 2021 RAMELIUS RESOURCES ANNUAL REPORT 2021 REVIEW OF OPERATIONS (CONTINUED) Figure 2: AISC per ounce and realised gold price for 2015-2021 Operational summary Unit Mt Magnet1 Edna May1 2021 2020 Change Change % Open pit Ore mined Grade Contained gold Underground Ore mined Grade Contained gold Total ore mined Mill production Tonnes milled Grade Contained gold Recovery Recovered gold Gold poured Gold sold kt g/t oz kt g/t oz kt kt g/t oz % oz oz oz - 13% - 4% - 16% + 41% - 16% + 19% 3,062 1.30 3,506 1.35 (444) (0.05) 127,553 151,880 (24,327) 749 1.40 33,625 656 5.10 2,313 1.26 93,928 246 3.80 107,520 30,007 137,527 116,028 902 4.74 641 5.63 261 (0.89) 21,499 1,405 2,559 3,964 4,147 (183) - 4% 1,886 2.76 167,467 96.4 161,455 161,159 2,749 1.33 117,312 93.5 109,689 110,950 4,635 1.91 284,779 95.2 271,144 272,109 4,235 1.80 245,319 94.9 232,867 230,426 400 0.11 39,460 0.3 38,277 41,683 + 9% + 6% + 16% + 0% + 16% + 18% 165,011 112,439 277,450 228,210 49,240 + 22% Table 1: Mine operations performance for the 2021 financial year 1 In the above table and throughout this report Mt Magnet includes the Vivien Gold Mine whilst the Edna May operation includes the Marda & Tampia Gold Mines. RAMELIUS RESOURCES ANNUAL REPORT 2021 15 REVIEW OF OPERATIONS (CONTINUED) MT MAGNET W I E V E R I S N O T A R E P O F O Figure 3: Mt Magnet key mining & exploration areas 16 RAMELIUS RESOURCES ANNUAL REPORT 2021 REVIEW OF OPERATIONS (CONTINUED) MT MAGNET (Continued) Mining Operations at Mt Magnet continued on a multi pit / underground basis throughout the 2021 financial year with ore being milled from four open pits and four underground projects. A summary of the main projects for the year is provided below: Area Eridanus Type Operational commentary Open pit Stellar Open pit Milky Way Open pit Vegas Open pit Shannon Underground Hill 60 Underground Water Tank Hill Underground Vivien Underground The large Eridanus open pit was the main source of ore feed for Mt Magnet for the year making up 26% of the mill feed. A total of 492k tonnes of ore was milled at a grade of 1.37g/t and a recovery of 94.3% for 20,471 ounces of recovered gold. Mining operations at Eridanus continued throughout the year. The waste cutback of the Stage 2 pit almost reached the original pit floor with a consequential increase in ore production in the second half of the year. A total of 671k tonnes of ore was mined at a grade of 0.96g/t for 20,723 ounces of contained gold. At 30 June 2021 there were 1.5 million tonnes of Eridanus ore stockpiled awaiting processing. Mining of the high grade ore zone was completed in September 2020. A total of 116k tonnes were milled at a grade of 3.81g/t and recovery of 95.3% for recovered gold of 13,591 ounces. Mining at Milky Way was completed in the 2020 financial year. A total of 322k tonnes was milled from stockpiles at a grade of 1.00g/t and recovery of 95.1% for recovered gold of 9,816 ounces. Mining at Vegas was completed in the 2020 financial year. A total of 186k tonnes was milled from stockpiles at a grade of 1.26g/t and a recovery of 94.9% for recovered gold of 7,154 ounces. Shannon underground production continued strongly during the year and is generating excellent quantities of high grade ore. Mining at the Shannon underground enabled 233k tonnes of ore to be milled at a grade of 7.12g/t and a recovery of 97.7% for 52,205 ounces of recovered gold. An underground drill programme was completed and shows that although the main Shannon lode narrows at depth, the orebody will continue for at least another 12 to 18 months providing high grade ore well beyond its original mine plan. Development for the year at Shannon totalled 3,256 metres. Mining at the Hill 60 underground continued during the year with 242k tonnes of ore being milled at a grade of 2.81g/t and a recovery of 95.9% for 20,950 ounces of recovered gold. An additional level is now planned below the high grade base 140mRL level and the decline will be recommenced as a result. Mining at Water Tank Hill was completed in September 2020. A total of 30k tonnes were milled at a grade of 3.15g/t and recovery of 97.2% for recovered gold of 2,955 ounces. Total mill production from Vivien was 204k tonnes at a grade of 5.21g/t and recovery of 97.4% for recovered gold of 33,372 ounces. Mining operations at Vivien have continued as planned, however the mine has been extended by a further two years with a further year of underground mining before an open pit is planned to mine the crown pillar on the north end of the deposit. Underground drilling continues with the aim to extend the current resource further, both at the Main Lode and the East (or hanging wall) Lode. RAMELIUS RESOURCES ANNUAL REPORT 2021 17 REVIEW OF OPERATIONS (CONTINUED) MT MAGNET (Continued) W I E V E R I S N O T A R E P O F O Milling Mill Production Tonnes milled Grade Contained gold Recovery Recovered gold Gold poured Gold sold Unit 2021 2020 2019 Change (%) kt g/t oz % oz oz oz 1,886 2.76 167,467 96.4 161,455 161,159 165,011 1,973 2.74 173,622 96.5 167,507 167,129 163,696 (87) 0.02 (6,155) (0.1) (6,052) (5,970) 1,315 - 4% + 1% - 4% - 0% - 4% - 4% + 1% Table 2: Mt Magnet mill production and sales for the 2021 financial year A total of 1,886k tonnes were processed at the Mt Magnet mill during the year compared to 1,973k tonnes in the prior year. The decrease in throughput, due to hardness of the ore, resulted in a 6,052 ounce or 4% decrease in recovered gold. The overall grades at the processing facility were comparable to the prior year with lower grades from the open pit sources being offset by a higher proportion of the mill feed being sourced from the higher grade underground mines. Gold production from Mt Magnet is forecast to be in the range of 130,000 and 150,000 ounces in the 2022 financial year. 18 RAMELIUS RESOURCES ANNUAL REPORT 2021 REVIEW OF OPERATIONS (CONTINUED) EDNA MAY RAMELIUS RESOURCES ANNUAL REPORT 2021 19 REVIEW OF OPERATIONS (CONTINUED) EDNA MAY (Continued) Mining Mining operations at Edna May focussed on the Edna May underground mine, Greenfinch open pit, and Marda Gold Mine (several open pits). A summary of these projects for the year is provided as follows: Area Edna May Underground Type Operational commentary Underground A total of 261k tonnes of ore was milled at a grade of 3.58g/t and recovery of 93.5% for 28,087 ounces of recovered gold. Mining transitioned from the development phase into stope production in the first half of the financial year. Greenfinch Open pit Marda Open pits The Greenfinch open pit served as the major source of ore at Edna May for the year making up 56% of mill feed. A total of 1,368k tonnes were milled at a grade of 1.00g/t and recovery of 93.4% for recovered gold of 41,251 ounces. Mining at Greenfinch is expected to be complete in the September 2021 quarter. Mining continued at Marda with mill feed sourced from five separate pits during the year comprising Goldstream, Dugite, Dolly Pott, Python and King Brown. Site preparation activities are currently underway at the outlying Golden Orb pit and mining will commence there in the 2022 financial year following the completion of mining at Goldstream and Dugite. A total of 593k tonnes were milled at a grade of 1.81g/t and recovery of 93.6% for recovered gold of 32,281 ounces. At 30 June 2021 a total of 360k tonnes of ore remained stockpiled at the mine site awaiting haulage and processing. W I E V E R I S N O T A R E P O F O Milling Mill Production Tonnes milled Grade Contained gold Recovery Recovered gold Gold poured Gold sold Unit 2021 kt g/t oz % oz oz oz 2,749 1.33 117,312 93.5 109,689 110,950 112,439 2020 2,262 0.99 71,697 91.2 65,360 63,297 64,514 Change Change (%) 487 0.34 45,615 2.3 44,329 47,653 47,925 + 22% + 34% + 64% + 3% + 68% + 75% + 74% Table 3: Edna May mill production & sales for the 2021 financial year A total of 2,749k tonnes were processed at the Edna May mill during the year compared to 2,262k tonnes in the prior year representing a 22% increase in throughput. This increased throughput was achieved by the mill returning to full operations for the complete year (the approval delays for Greenfinch required a 12 day on / 9 days off roster from October 2019 to March 2020 in the prior year). Milled grades were also up 34% resulting in a 68% increase in recovered gold when compared to the prior year. The increase in milled grades has been due to the main source of ore feed transitioning from the low grade stockpiles to the higher grade open pit ore from Greenfinch and Marda. In the prior year 81% of ore feed was sourced from low grade stockpiles whilst in the current period this dropped to 19% with Greenfinch and Marda making up 71% of the ore feed. The balance of the ore feed was from the Edna May underground mine. Gold production from Edna May is forecast to be in the range of 130,000 - 150,000 ounces in the 2022 financial year with the introduction of higher grade Tampia ore. 20 RAMELIUS RESOURCES ANNUAL REPORT 2021 REVIEW OF OPERATIONS (CONTINUED) Development and exploration projects Development projects Penny Gold Mine (Murchison region, WA) The Penny Gold Mine is located approximately 20km south of Youanmi, or 170km by road south east of the Mt Magnet Gold Mine, and approximately 500km north east of Perth in Western Australia. Ore production is planned to be processed through the Mt Magnet processing plant as part of an overall feed blend. No capital modifications to the processing facility are required in order to process the Penny ore. On 9 November 2020 Ramelius released the results of the Penny Feasibility Study and advised the Board’s approval to commence the project development. As a result of the compelling financial outcomes forecast from the Penny Feasibility Study, the Board also approved a decision to mine. In the March 2021 quarter, works commenced on regulatory approvals, contract negotiations, and the purchase of long lead items. All key approvals were received in the June 2021 quarter and accordingly camp construction commenced and the open pit mining and catering contracts were awarded. Open pit mining is expected to commence in the September 2021 quarter before underground development commences in the second half of the 2022 financial year. In the coming year only modest amounts of ore will be sourced from the Penny Gold Mine as operations focus on the development of the underground mine. Tampia Gold Mine (Narembeen, WA) The Tampia Gold Mine is located near Narembeen in Western Australia. The Feasibility Study was completed in April 2020 and focused on the option to haul ore to Ramelius’ Edna May processing facility. On 25 January 2021, it was announced that the Tampia 10% JV interest and freehold land had been purchased. Since the land purchase settlement, development of the project has progressed with completion of the 100 person Narembeen camp and mobilisation of the open pit mining contractor. Site establishment works, grade control drilling and mining has also commenced. First ore was mined in June 2021. Upgrade works on the local shire roads were completed and ore haulage to Edna May commenced on 1 July 2021. Mining/processing studies and resources conversion During the financial year progress has been made on various mining and processing studies, based around the Mt Magnet and Edna May production centres. On 2 August 2021, Ramelius announced a new 1.84 million ounce mine plan across nine years to financial year 2030, including a low grade tail in financial years 2029 and 2030. This mine plan resulted in a total increase in expected gold production of 27%. Ramelius plans to continue to leverage its large resource base, particularly at Mt Magnet and Edna May, to produce longer mine plans with a higher conversion of resources. Ramelius notes that any increase in production that is due solely to the higher gold price environment will generally lead to higher underlying operating costs due to a lower cut off grade being applied to the design parameters. Mining and processing studies in progress or planned for the 2022 financial year include: Edna May Edna May Stage 3 Pre Feasibility Completion of Pre Feasibility to revisit the large cutback on the original Stage 2 pit to potentially unlock a significant volume of lower grade resources which would potentially secure a mine life at Edna May out towards 7-8 years. With planned drilling in the northern (Golden Point) area and recent market fluctuations affecting a number of study inputs, more time is required to appropriately finalise minable resources, capital and operating costs. The Edna May Stage 3 project is very sensitive to gold price, grade and operating costs, particularly mining and development costs. The results of the Pre Feasibility Study for Stage 3 will determine if the project progresses to a Feasibility Study. Mt Magnet Galaxy Underground Scoping Study The Galaxy Underground project (comprising Saturn, Mars, Titan, Perseverance & Hill 50) to convert existing resources was previously considered for a Scoping Study for completion at the end of December 2021. Given opportunity to access the deposit reasonably quickly, the mining study and potential project start date is to be brought forward. Eridanus Underground Scoping Study Further options for underground mining have been evaluated using the updated April 2021 resource model below the planned Eridanus pit currently being mined. The overall lower grade nature of the deposit and lack of continuity of the higher grade zones, has led to discontinuous mining areas at the higher cut off grades typically used in underground mine design. This is largely due to the lack of RAMELIUS RESOURCES ANNUAL REPORT 2021 21 REVIEW OF OPERATIONS (CONTINUED) DEVELOPMENT AND EXPLORATION PROJECTS (Continued) close spaced drilling that an ore body of this nature requires, especially for any selective style underground mining method. It is therefore important to (largely) complete the existing open cut mine and ensure adequate drill coverage into the potential underground deposit before any future studies can be completed. This is another reason why the Galaxy mining study will take priority over Eridanus underground. Diamond drilling is ongoing at Eridanus, particularly along strike to the north east where mineralsation continues to be intersected. Additional ounces per vertical metre and demonstrated continuity between high grade zones are expected to improve project economics in the future. Vivien Mine extension Developments during the 2021 financial year included identification of economic ore in the parallel East Lode (hanging wall) vein structure and re modelling of oxide remnant resource above the underground, potentially leading to a pit cutback at the end of the mine life. Whilst the current mine plan for Vivien continues production for the entire 2022 financial year an extensional underground drilling program has commenced with the aim to add additional resources at depth on the Main Lode and East Lode. An updated study summary for other mining/processing studies currently being undertaken is shown in the table below: Site Mt Magnet Mt Magnet Mt Magnet Study Description Morning Star underground: Scoping Study to convert a % of ~80koz Mineral Resource Hill 50 underground: Concept Study to convert a % of ~340koz Mineral Resource Processing facility upgrade: Feasibility Study on upgrade from 2.0 to 2.5-2.7 Mtpa (depending on the outcomes of the underground studies above) Estimated Completion 31 December 2021 31 March 2022 TBA W I E V E R I S N O T A R E P O F O Exploration projects Ramelius’ exploration activities focussed on the Mt Magnet area during the year, supplemented by smaller work programs at the Penny, Edna May, Marda and Tampia areas. A combined aggregate of 54,092m of aircore, reverse circulation (RC) and diamond core drilling has been completed during the period. Mt Magnet region An aggregate of 15,075m of exploratory RC and 6,406m of diamond drilling has been completed in the Mt Magnet region during the year. Drilling continues to focus on extensions of Eridanus mineralisation at depth and along strike. Programmes have also been completed at Penny, Orion-Franks Tower and Macross. Eridanus Deeps Prospect Drilling tested the potential for higher grade mineralisation at depth below the Eridanus Stage 2 pit and along strike within the Eridanus Granodiorite. A preliminary evaluation has established scope for a bulk underground mining scenario beneath the Eridanus Stage 2 pit. More recent deep drilling continues to evaluate upside to the underground potential both below that study area, and along strike to the east, testing the potential for higher grade mineralisation. Broad zones of granodiorite hosted stockwork mineralisation continue to be intersected at depth, with some higher grade zones of mineralisation. Higher grade zones at Eridanus Deeps are associated with vein stockworking in the footwall position of the host intrusive granodiorite (adjacent to an interpreted flexure in dip orientation), and more spectacularly with individual veins up to one metre in width. The latter are interpreted as part of a previously recognised, sub vertically dipping, north northwest trending vein series. Abundance and continuity of these broader high grade veins will be evaluated by further drilling. Orion (Franks Tower Trend) The Orion-Franks Tower Trend represents a north-easterly extension of the Eridanus Granodiorite. Broad zones of stockwork related and supergene mineralisation have been previously intersected and infill drilling to define mineralisation continuity has been undertaken with encouraging results. Drill programmes have culminated in an update of the Mineral Resource, and the inclusion of several smaller oxide pits at Orion and Franks Tower in the latest mine plan. Macross Prospect Structural setting and presence of granodiorite intrusives at the Macross Prospect suggest a possible analogy of the Eridanus-Orion-Franks Tower mineralised trend. RC drilling commenced at year end to evaluate the target area with all results pending. 22 RAMELIUS RESOURCES ANNUAL REPORT 2021 REVIEW OF OPERATIONS (CONTINUED) DEVELOPMENT AND EXPLORATION PROJECTS (Continued) Penny Further exploration drilling has been conducted around the high grade Penny North. RC and diamond drilling targeted the Penny Shear Zone, Penny Far North, and the parallel Buckshot Trend, as well as depth extensions to the Penny North Deposit (Penny Deeps Prospect). The latter in two stages with a more recent phase targeting the mineralised Penny structure 200-300m below previous deepest drill holes. Sub economic results have been returned to date. Down hole electromagnetic survey data is being reviewed for off hole conductor zones that could indicate the presence of more abundant sulphides within the mineralised structure as potential follow-up targets. Edna May Region An aggregate of 21,100m of exploratory aircore and 11,511m of RC drilling has been completed in the Edna May Region (including Tampia and Marda) during the year. Drilling is subject to private landholder access and environmental permitting between Edna May and Tampia. Edna May Mine Evaluation of the Stage 3 cutback at the Edna May Mine is a key focus. The Golden Point Gneiss situated immediately east of the mine area is an analogy of the Edna May Gneiss mine host, and delineation of shallow mineralisation at Golden Point has the potential to improve financial metrics of the Stage 3 cutback. Approvals for RC drilling have recently been granted and work will commence in August weather pending. Greenfinch Potential for westerly extensions of Edna May mineralisation have been tested by RC drilling, successfully identifying anomalous gold intersections in amphibolite host rocks in an area previously believed to be geologically unprospective – further work is now being planned but will be subject to environmental approvals. Marda A number of Banded Iron Formation (BIF) hosted deposits in the Marda area are currently being exploited by mining. At the Die Hardy, Golden Orb and Redlegs Prospects, RC drilling has tested depth extensions of mineralisation beneath pre existing shallowly defined resources in addition to some infill. The Die Hardy programme recorded an extension of mineralisation, but at lower tenor to shallower mineralised zones. Golden Orb and Redlegs returned low level results. Surface geochemical targets at the Gopher and Prindiville Prospects have been tested by aircore drilling with low level responses. Interpretation of recent aeromagnetic surveys in conjunction with geological, regolith and surface geochemical review is defining new target areas. Tampia The Tampia Gold Mine is situated within a northerly trending surface geochemical trend that continues to be the focus of exploration activity. Aircore drill testing of this extensive gold arsenic trend is continuing – low level results have been returned to date. Planning is also in progress to evaluate mineralised RC drill intercepts from an area of surface geochemical anomalism to the south of the mine area. More regionally, review of recent aeromagnetic surveys is underway to generate new geological targets. Mt Hampton (including Symes’ Find) Opportunities for resource extension around the Symes’ Find resource area are being evaluated. The resource area comprises extensive mineralised laterite with underlying primary higher grade ore shoots within mafic and intermediate volcanic lithologies. Holleton Mining Centre Encouraging RC drilling results have been previously returned from the Calzoni and Columbus trends within the Holleton Mining Centre and follow up work aimed at defining and extending previously intersected mineralisation is being planned. Flora and Fauna surveys have been completed however some environmental permitting remains prior to ground disturbance activities. Other Nulla South Farm in & Joint Venture - Ramelius 75% Ramelius has earnt 75% of the JV and will now review remaining targets. Regional aircore drilling during the year returned low level anomalous results. Gibb Rock Farm in & Joint Venture – Ramelius earning 75% Aircore drilling of surface geochemical targets at the Brahma West Prospect and in regional areas has been conducted and returned low level anomalous results. Jupiter Farm in & Joint Venture Project (Nevada USA) – Ramelius earning 75% Ramelius gave notice of its intention to withdraw from the Joint Venture during the financial year. RAMELIUS RESOURCES ANNUAL REPORT 2021 23 RESOURCES & RESERVES Company summary as at 30 June 2021 Mineral resources up 15% Total Mineral Resources are estimated to be; • 110 Mt at 1.6 g/t Au for 5.4 Moz of gold Total Ore Reserves are estimated to be; • 17 Mt at 2.0 g/t Au for 1.1 Moz of gold Increases in Mineral Resources were achieved via exploration drilling and resource additions at Ramelius’ Eridanus, Galaxy and Edna May gold projects in Western Australia. As in previous years, the Company’s ability to consistently meet production guidance has been underpinned by realistic resource modelling and deliverable reserve estimates. Ore Reserves have been maintained, with mining depletions matched by additions. Studies on conversion of the new resources to reserves are in progress. S E C R U O S E R S E V R E S E R & Figure 4: Ramelius historical Mineral Resources and Ore Reserves 24 RAMELIUS RESOURCES ANNUAL REPORT 2021 RESOURCES & RESERVES (CONTINUED) Mineral Resources MINERAL RESOURCES AS AT 30 JUNE 2021 - INCLUSIVE OF RESERVES Project Deposit Morning Star Bartus Group Boomer Britannia Well Brown Hill Bullocks Eastern Jaspilite Eclipse Eridanus Franks Tower Golden Stream Golden Treasure Lone Pine Milky Way Orion Spearmont-Galtee Welcome - Baxter Open Pit deposits Galaxy UG Hill 50 Deeps Hill 60 Morning Star Deeps Shannon UG deposits ROM & LG stocks Total Mt Magnet Edna May Edna May UG Greenfinch ROM & LG stocks Total Edna May Mt Magnet Edna May Vivien Vivien UG Symes Find Symes Dolly Pot Marda Python Golden Orb King Brown Die Hardy ROM & LG stocks Total Marda Tampia Tampia Penny North, West & Magenta Total Resource Table 4: Mineral Resources Measured g/t t oz 49,000 2.2 4,000 150,000 980,000 2.2 1.1 10,000 35,000 t 4,900,000 110,000 120,000 180,000 1,100,000 200,000 120,000 170,000 14,000,000 2,000,000 150,000 780,000 490,000 82,000 1,900,000 220,000 1,400,000 280,000 310,000 56,000 640,000 4,200,000 6,300,000 1.6 1.3 5.5 3.7 19.2 5.8 0.6 1.3 600,000 600,0000 250,000 0.5 0.5 6.1 11,000 280,000 60,000 29,000,000 7,000,000 930,000 160,000 190,000 57,000 8,300,000 49,000 36,000 35,000 120,000 84,000 260,000 37,000,000 23,000,000 290,000 970,000 8,900 8,900 24,000,000 240,000 48,000 570,000 340,000 340,000 380,000 110,000 1,500,000 2,700,000 7,700,000 360,000 360,000 390,000 1.7 1.6 2.4 19,900 19,000 31,000 Indicated g/t Total Resource g/t t 4,300,000 240,000 790,000 oz 300,000 8,000 68,000 12,000 59,000 21,000 11,000 12,000 580,000 97,000 14,000 28,000 21,000 29,000 100,000 490,000 40,000 130,000 41,000 4,000,000 480,000 67,000 880,000 390,000 1,600,000 240,000 580,000 200,000 1,400,000 14,000,000 1,500,000 400,000 30,000 330,000 18,000 2,200,000 470,000 210,000 17,000 26,000 9,800 730,000 15,000 2,100,000 17,000,000 7,000,000 36,000 520,000 730,000 40,000 29,000 800,000 40,000 35,000 18,000 18,000 35,000 15,000 72,000 7,600,000 88,000 39,000 47,000 180,000 200,000 49,000 550,000 160,000 420,000 1,000,000 130,000 Inferred g/t 1.5 1.6 1.0 1.2 2.5 2.5 2.1 1.0 1.5 1.2 1.0 1.7 1.1 2.8 2.6 1.8 1.3 2.0 6.4 2.0 5.0 5.0 3.2 1.6 1.0 5.2 0.8 1.0 3.7 1.2 1.6 1.8 1.7 1.8 1.3 1.5 1.8 6.6 1.9 2.1 1.8 2.0 1.6 3.3 2.8 2.2 1.3 1.5 2.9 1.1 1.3 1.1 1.7 1.6 1.5 2.1 7.0 3.3 4.2 5.4 2.7 1.8 1.0 4.3 0.9 1.0 5.1 1.9 1.7 1.7 2.9 4.3 1.5 1.9 1.7 oz 210,000 12,000 26,000 19,000 3,000 11,000 3,000 130,000 23,000 2,700 28,000 21,000 57,000 21,000 48,000 11,000 620,000 93,000 81,000 2,000 53,000 3,000 230,000 850,000 230,000 6,000 14,000 240,000 11,000 1,500 2,400 10,000 11,000 2,800 23,000 50,000 7,400 t 9,200,000 400,000 2,000,000 180,000 1,600,000 240,000 400,000 210,000 19,000,000 2,400,000 220,000 1,700,000 870,000 2,400,000 2,200,000 580,000 700,000 45,000,000 8,500,000 1,600,000 500,000 530,000 130,000 11,000,000 4,200,000 60,000,000 30,000,000 320,000 1,500,000 600,000 33,000,000 580,000 610,000 390,000 520,000 580,000 150,000 2,000,000 360,000 4,000,000 8,200,000 oz 510,000 24,000 94,000 12,000 78,000 24,000 32,000 15,000 750,000 120,000 17,000 56,000 42,000 86,000 120,000 48,000 37,000 2,100,000 560,000 340,000 56,000 79,000 47,000 1,100,000 84,000 3,200,000 960,000 46,000 43,000 8,900 1,100,000 99,0000 37,000 21,000 28,000 47,000 17,000 95,000 19,000 230,000 460,000 1.7 1.9 1.5 2.1 1.5 3.1 2.5 2.2 1.2 1.5 2.4 1.0 1.5 1.1 1.8 2.6 1.7 1.4 2.1 6.6 3.4 4.7 11.2 3.0 0.6 1.7 1.0 4.4 0.9 0.5 1.0 5.3 1.9 1.7 1.7 2.5 3.5 1.5 1.6 1.8 1.7 7,900,000 1.5 370,000 73,000,000 1.6 3,800,000 26,000,000 1.5 1,200,000 110,000,000 1.6 5,400,000 420,000 19.0 260,000 200,000 42,000 620,000 15.0 300,000 Figures rounded to 2 significant figures. Rounding errors may occur. RAMELIUS RESOURCES ANNUAL REPORT 2021 25 RESOURCES & RESERVES (CONTINUED) 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 Checkers processing facility. Ramelius has operated the project continuously since 2012. Current and recent mining operations include the Eridanus, Milky Way, Stellar and Vegas open pits and the Hill 60 and Shannon underground mines. The Edna May mine was acquired in October 2017. It comprises of the large-scale Edna May granitoid hosted, stockwork deposit and the related, adjacent Greenfinch deposit. Two higher grade cross-cutting quartz lodes, the Fuji and the Jonathan, are being mined underground within the broader Edna May deposit. Mining at the Greenfinch open pit provided the major ore source during 2021 and has recently been completed. Marda and Tampia will form major mill feed sources going forward. Vivien is a high-grade quartz lode deposit, located near Leinster. Mining commenced in 2015 and Vivien has been a steady contributor with ore trucked to the Mt Magnet mill. Marda mining operations commenced in late 2019. It consists of seven mainly BIF hosted deposits being mined by open pit. It is located 130km north of Southern Cross and ore is hauled and milled at Edna May. All deposits reported in this update have been depleted for mining during the 2021 financial year. Continued exploration, resource definition and grade control drilling has delivered increases to resources and reserves for many of the deposits including Eridanus, Galaxy, Edna May, Shannon and Vivien. See RMS ASX releases below for additional Mineral Resource reporting details: ‘Penny & Edna May Study Updates’, 9 November 2020 ‘Mt Magnet & Edna May Study Updates’, 28 January 2021 ‘Ramelius Mine Plan Increases 27% to 1.84Moz’, 2 August 2021 • • • Decreases were largely due to mining depletion with some minor re-modelling and/or re-classification. 526 S E C R U O S E R S E V R E S E R & 291 450 ) 0 0 0 ‘ ( S E C N U O 5,500 5,000 4,500 4,000 3,500 3,000 June 2020 Resource Mining Depletion Ore Stock Change Modelling & Categorisation Exploration, Resource & GC Drilling Project Aquisition June 2021 Resource Figure 5: Mineral Resource Change 4,7005,400 26 RAMELIUS RESOURCES ANNUAL REPORT 2021 RESOURCES & RESERVES (CONTINUED) 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. Mining commenced in April 2021 and ore is being hauled 140km to Edna May for milling. 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. Mining Approvals were received in 2021 and site infrastructure works are in progress. All resources are based on combinations of RC and diamond drillholes. 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. Generally a substantial proportion of drill data is 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 envelopes and geological interpretations. Geological understanding has formed the basis of all ore interpretations and is generated prior to grade interpretations. Ore domain interpretations have then been wireframed using geological software, including Micromine, Leapfrog & Surpac. Mineralisation has been grouped by domain where required and statistical analysis, top-cutting and estimation is 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 drillhole 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 exceptions of Tampia and Symes, have had some degree of recent production or historic mining. Resources are reported using cut-offs approximating an A$1,800 - $2,300/oz gold price. Ore Reserves ORE RESERVE STATEMENT AS AT 30 JUNE 2021 Project Mine Proven g/t t oz Total Reserve g/t Boomer Brown Hill Eridanus Golden Stream Morning Star Total Open Pit Hill 60 Shannon Total Underground ROM & LG Stocks Mt Magnet Total Edna May UG Greenfinch ROM & LG Stocks Ednan May Total Vivien UG Dolly Pot Python Golden Orb King Brown Die Hardy ROM & LG Stocks Marda Total Mt Magnet Edna May Vivien Marda Tampia Tampia Penny Total Reserve Penny North & Magenta t 130,000 620,000 3,900,000 91,000 1,100,000 5,800,000 110,000 16,000 470,000 6,000,000 380,000 200,000 590,000 180,000 100,000 38,000 290,000 65,000 790,000 Probable g/t 2.7 1.6 1.3 2.9 1.9 1.5 3.2 3.8 3.7 1.5 3.2 1.2 2.5 5.1 1.6 3.8 2.7 3.9 1.5 2.0 2.4 14.0 2.5 40,000 7,800 oz 11,000 31,000 160,000 8,500 68,000 280,000 12,000 1,900 55,000 t 130,000 620,000 3,900,000 91,000 1,100,000 5,800,000 410,000 180,000 660,000 4,200,000 290,000 11,000,000 380,000 200,000 600,000 1,200,000 180,000 100,000 38,000 290,000 65,000 790,000 360,000 1,600,000 82,000 2,500,000 230,000 230,000 500,000 910,000 17,000,000 47,000 30,000 5,300 4,600 25,000 8,100 38,000 oz 11,000 31,000 160,000 8,500 68,000 280,000 43,000 39,000 91,000 84,000 440,000 40,000 7,800 8,900 56,000 30,000 5,300 4,600 25,000 8,100 38,000 19,000 100,000 230,000 230,000 1,100,000 2.7 1.6 1.3 2.9 1.9 1.5 3.2 6.9 4.3 0.6 1.3 3.2 1.2 0.5 1.5 5.1 1.6 3.8 2.7 3.9 1.5 1.6 1.9 2.7 14.0 2.0 290,000 160,000 190,000 4,200,000 4,700,00 600,000 600,000 3.2 7.2 5.9 0.6 1.0 0.5 0.5 31,000 37,000 36,000 84,000 150,000 8,900 8,900 360,000 360,000 1.7 1.6 5,600,000 1.0 19,000 19,000 1,300,000 3,000,000 500,000 180,000 11,000,000 Table 5: Ore Reserves Figures rounded to 2 significant figures. Rounding errors may occur. RAMELIUS RESOURCES ANNUAL REPORT 2021 RAMELIUS RESOURCES ANNUAL REPORT 2021 27 RESOURCES & RESERVES (CONTINUED) Ore Reserve commentary All Ore Reserves have been estimated from Measured and Indicated Resources only. All current pit and underground operations were depleted to 30 June 2021. 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 Mine Plan. Mining approvals processes are in progress for the Die Hardy open pit. A maximum A$2,250/oz gold price has been used to estimate Ore Reserves and determine appropriate cut-offs. 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 & low-grade stocks mined under Ramelius’s ownership. 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 Paul Hucker (Ore Reserves), who are Competent Persons and Members of The Australasian Institute of Mining and Metallurgy. Rob Hutchison and Paul Hucker are full-time employees of the company. Rob Hutchison and Paul Hucker 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 Paul Hucker consent to the inclusion in this report of the matters based on their information in the form and context in which it appears. S E C R U O S E R S E V R E S E R & 28 RAMELIUS RESOURCES ANNUAL REPORT 2021 SUSTAINABILITY REPORT 2021 RAMELIUS RESOURCES ANNUAL REPORT 2021 29 2021 Achievements About Ramelius Our Business Our People Our Communities Our Environment Performance Data 30 32 39 43 48 52 57 I I Y T L B A N A T S U S I T R O P E R 30 RAMELIUS RESOURCES ANNUAL REPORT 2021 2021 ACHIEVEMENTS FY21 HIGHLIGHTS OUR BUSINESS OUR PEOPLE Economic performance: RECORD CASH FLOW, DIVIDENDS AND WAGE PAYMENTS Health, safety and wellbeing: 20% REDUCTION IN TOTAL RECORDABLE INJURY FREQUENCY RATE Regulatory and compliance: FIRST MODERN SLAVERY REPORT SUBMITTED Employment and contractors: 45% OF GRADUATE PROGRAM MEMBERS WERE FEMALE Organisational governance: ZERO FINES OR MATERIAL INCIDENTS Talent attraction, development and retention: TALENT STRATEGY ALIGNED WITH A STREAMLINED ONBOARDING PROCESS; GROUP TURNOVER MEASURED AT 14.9% RAMELIUS RESOURCES ANNUAL REPORT 2021 31 OUR COMMUNITIES OUR ENVIRONMENT Indigenous and native title: TWO INDIGENOUS DEVELOPMENT PROJECTS Water: 13.5% OF WATER RECYCLED Taxes, royalties and supplier payments: A$530m CONTRIBUTED TO AUSTRALIAN ECONOMY Emissions and energy: COMPLETED FIRST PHASE OF TCFD ALIGMENT FOR CLIMATE RISK EMISSIONS INTENSITY REDUCED 8% Community relations and investment: CONTRIBUTED OVER $450,000 TO COMMUNITY ORGANISATIONS Waste, effluents, air pollution: WASTEWATER TREATMENT AT TAMPIA USING WASTEWATER FOR IRRIGATION I I Y T L B A N A T S U S I T R O P E R 32 RAMELIUS RESOURCES ANNUAL REPORT 2021 SUSTAINABILITY REPORT (CONTINUED) THE CEO ON SUSTAINABILITY AT RAMELIUS Dear Stakeholders, This marks the second standalone annual Sustainability Report produced by Ramelius and I am pleased to be able to say that since the release of our maiden report, we have continued to make solid progress towards our goal of becoming a sustainable gold miner that focuses on delivering superior returns for stakeholders. As stated previously, what that means to us is delivering more than just a financial benefit to shareholders. While creating shareholder value will always remain at the heart of what we do, it must be done in a way that considers the interests of all stakeholders, that demonstrates we are a responsible corporate citizen and that ensures our environmental footprint is as minimal as possible. We don’t yet claim to have reached our goal, but in financial year 2021 we built on the foundations laid in previous years, gathering further information on best practice in sustainability in the mining industry and getting ourselves to a point at which we can start to think about putting in place firm targets in accordance with Taskforce on Climate-related Financial Disclosures (TCFD) recommendations. On the whole, we believe we are heading in the right direction. We have started participating in ESG benchmarking assessments undertaken by organisations such as S&P Corporate Sustainability Assessment and MSCI and improvement is evident. In financial year 2021 our rating in the MSCI ESG Ratings assessment for resilience to long-term ESG risks went up from ‘BB’ to ‘BBB’, while our ESG score as determined by Sustainalytics continues to improve. Led by Non-Executive Director Natalia Streltsova, the Company’s Risk & Sustainability Committee is doing a lot of work assisting the Board in its responsibilities overseeing risk, governance and sustainability activities which include setting the objectives for environmental and community obligations, ethical standards and compliance. Our pursuit of sustainability has no doubt been aided by the financial health of the Company, which is as strong as it has ever been. In financial year 2021, we contributed over $530 million to the Australian economy including approximately $10.2 million spent with local businesses, employees and community organisations. Along with our ongoing program of carefully selected sponsorships and donations, we will continue to partner with our community stakeholders on legacy projects that provide benefits to the communities in which we operate well beyond the life of the mine. At the end of the day, our success in becoming a sustainable gold miner rests with our employees. We need to ensure they are clear on what the Company stands for so they can buy in wholeheartedly. With this in mind, the Board signed off on a new set of values earlier this year: • We Empower our people • We achieve Fit-for-Purpose outcomes • We Deliver and do it safely • We are Authentic In finishing, I would like to thank all our employees and contractors for their efforts to date on the sustainability front and urge them to embrace our new values as we strive for continued improvement and excellence. Yours sincerely, Mark Zeptner Managing Director ABOUT RAMELIUS Mission statement To be a sustainable gold producer that focuses on delivering superior returns for stakeholders. Our values At Ramelius, we are defined by the following core values: We Empower our people We achieve Fit-for-Purpose outcomes We Deliver and do it safely We are Authentic Our culture is defined by a ‘fit-for-purpose’ and ‘can-do’ attitude. RAMELIUS RESOURCES ANNUAL REPORT 2021 33 SUSTAINABILITY REPORT (CONTINUED) 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 corporate strategy Our Strategic Priorities 1 Feed Existing Hubs 2 Acquire Third Hub 3 Ramp Up Greenfields 4 Grow Capability 5 Do the Essentials Sustainability pillars Our business • Economic performance • Regulatory and compliance • Organisational governance Our people • Health, safety and wellbeing • Employment and contractors • Talent attraction, development and retention Our communities • Indigenous and native title • Taxes, royalties and supplier payments • Community relations and investment Our environment • Water • Emissions and energy • Waste, effluents, air pollution I I Y T L B A N A T S U S I T R O P E R 34 RAMELIUS RESOURCES ANNUAL REPORT 2021 SUSTAINABILITY REPORT (CONTINUED) Sustainability at Ramelius 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 period from 1 July 2020 to 30 June 2021 (FY21). The report forms part of our annual corporate reporting suite. It offers an account of our interaction with our stakeholders and complements Ramelius’ FY21 Annual Report. The currency used throughout this report is Australian Dollars (A$). Group information Ramelius Resources Limited (Ramelius) 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 Penny Gold Mine, the Edna May Gold Mine, Tampia Gold Mine and the Marda Gold Mine and associated processing plants around Western Australia. In addition to the operations listed above, Ramelius is involved in three WA-based exploration projects: Mt Magnet, Edna May and Holleton (Symes’ Find). Further information is available on our website. WESTERN AUSTRALIA MT MAGNET Mt Magnet Geraldton PENNY Leinster VIVIEN Laverton Leonora MARDA Coolgardie Kalgoorlie 200km EDNA MAY Bullfinch Westonia Southern Cross PERTH Narembeen Norseman TAMPIA Bunbury Esperance Albany Ramelius Production Centres Mine / Development Projects Haulage Direction RAMELIUS RESOURCES ANNUAL REPORT 2021 35 SUSTAINABILITY REPORT (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 SUPPORT SERVICES TRANSPORTATION Camp management services Freight services Ore Haulage contractor Security services Aviation charter companies Power, communication and IT services Insurance Employee benefits Personal protective equipment and clothing Medical, health and safety services Labour supply Water and waste management REFINING AND SALES Refinery Customers Bullion freight and security I I Y T L B A N A T S U S I T R O P E R 36 RAMELIUS RESOURCES ANNUAL REPORT 2021 SUSTAINABILITY REPORT (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 10 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 10 specific SDGs: SDG number SDG indicator Ramelius contributions Goal 3: Good Health and Well-being 3.5 Strengthen the prevention and treatment of substance abuse, including narcotic drug abuse and harmful use of alcohol 3.D Strengthen the capacity of all countries, developing countries, for early warning, risk reduction and management of national and global health risks. • 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. SDG number SDG indicator Ramelius contributions Goal 5: Gender Equality 5.5 Ensure women’s full and • We are committed to recruiting the best candidates regardless of effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life gender, age, religion or cultural background. Our Diversity Policy states our commitment to a workforce comprised of individuals with a wide range of backgrounds, skills and experiences. • Ramelius has developed a Diversity & Inclusion Strategy which articulates the targets of year-on-year improvement in gender diversity across the Group and within leadership roles. Regular overall gender pay gap and like for like remuneration analysis allows outcomes to be reviewed and measured. SDG number SDG indicator Ramelius contributions Goal 8: Decent Work and Economic Growth 8.7 Take immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labour, including recruitment and use of child soldiers, and by 2025 end child labour in all its forms • 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. In FY21 we released the first Modern Slavery Statement which outlined an assessment to identify key modern slavery risks in our operations and supply chain and updated our supplier contracts with modern slavery provisions. SDG number SDG indicator Ramelius contributions Goal 9: Industry, Innovation and Infrastructure 9.5 Enhance scientific research, upgrade the technological capabilities of industrial sectors in all countries, in particular developing countries, including, by 2030, encouraging innovation and substantially increasing the number of research and development workers per 1 million people and public and private research and development spending. • 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 with 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 also partner with CSIRO on a range of research and innovation projects. RAMELIUS RESOURCES ANNUAL REPORT 2021 37 SUSTAINABILITY REPORT (CONTINUED) SDG number SDG indicator Ramelius contributions Goal 10: Reduced Inequalities 10.2 By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status • We consider native titleholders/indigenous communities one of our 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. SDG number SDG indicator Ramelius contributions Goal 11: Sustainable Cities and Communities 11.4 Strengthen efforts to protect and safeguard the world’s cultural and natural heritage • 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. SDG number SDG indicator Ramelius contributions Goal 12: Responsible Consumption and Production 12.6 Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle • In addition to this Sustainability Report, 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. SDG number SDG indicator Ramelius contributions Goal 13: Climate Action 13.1 Strengthen resilience and adaptive capacity to climate related hazards and natural disasters in all countries 13.3 Improve education, awareness- raising and human and institutional capacity on climate change mitigation, adaptation, impact reduction and early warning • We are committed to understanding and proactively managing the impact of climate-related risks to our business and have started the first phase of reporting against the TCFD framework. 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. • We understand and 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. SDG number SDG indicator Ramelius contributions Goal 17: Partnership for the goals 17.17 Encourage and promote • Ramelius partners with an extended number of public, private and civil effective public, public-private and civil society partnerships, building on the experience and resourcing strategies of partnerships Data, monitoring and accountability society organisations to benefit stakeholders and drive positive impacts in communities. A selection of these can be found in the community section of this report. I I Y T L B A N A T S U S I T R O P E R 38 RAMELIUS RESOURCES ANNUAL REPORT 2021 SUSTAINABILITY REPORT (CONTINUED) Stakeholder engagement One of our key sustainability pillars is the engagement of stakeholders through regular consultation processes, which are guided by our Community Consultation Policy. Proactive dialogue allows us to keep the stakeholders informed about our activities and to provide a forum through which they can provide feedback to our business. In FY21 we have had regular meetings and correspondence with government departments, local government shires, pastoralists and native title Groups. After the initial, largely internally focussed materiality process in FY20, the Ramelius Board implemented a more thorough, considered and comprehensive approach in FY21. This process sought to ensure topics being prioritised were as important to Ramelius stakeholders as they are to the business. Partnering with specialist ESG agency Futureproof Consulting, feedback was sought through surveys distributed to both internal staff and external stakeholders including shareholders, investors, lenders, insurers, key suppliers, customers, local community, landowners and shire representatives. Almost a fifth of all Ramelius staff took the opportunity to contribute which demonstrated a strong interest in the strategic direction of the Company’s ESG activities. The survey asked stakeholders to rate the importance of economic, environmental, social and governance issues to inform the new FY21 Materiality Matrix (below). 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/indigenous groups; • Media and non-governmental organisations (NGO)s; and • Education, research and training organisations. Material topics and matrix This report focuses on the economic, social and environmental topics identified as being of material value to our stakeholders and the Ramelius business. Following Global Reporting Initiative (GRI) sustainability reporting best practice, in FY21 we prioritised our material topics by combining feedback from internal and external stakeholders, the Board, Executive, internal Sustainability Project Team 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: Extremely important Extremely important Economic performance Health, safety & wellbeing Talent a(cid:7)rac(cid:6)on, development & reten(cid:6)on Water Employment & contractors Community investment & engagement Regulatory & compliance S t a k e h o d e r s l Taxes, supplier payments & royal(cid:6)es Biodiversity Mine closure & rehabilita(cid:6)on Ethics & Human Rights Waste & tailings Greenhouse gas emissions & energy Indigenous Peoples & Na(cid:6)ve Title Diversity Innova(cid:6)on Informa(cid:6)on technology Economic performance Health, safety & wellbeing Water Talent a(cid:7)rac(cid:6)on, development & reten(cid:6)on Employment & contractors Community investment & engagement Taxes, supplier payments & royal(cid:6)es Regulatory & compliance Greenhouse gas emissions & energy Biodiversity Ethics & Human Rights Mine closure & rehabilita(cid:6)on Waste & tailings Indigenous Peoples & Na(cid:6)ve Title Diversity Innova(cid:6)on Informa(cid:6)on technology Extremely important Less important Ramelius Resources Extremely important Health, safety & wellbeing Economic performance Talent a(cid:7)rac(cid:6)on, development & reten(cid:6)on Community investment & engagement Employment & contractors Water Regulatory & compliance Ethics & Human Rights Waste & tailings Taxes, supplier payments & royal(cid:6)es Mine closure & rehabilita(cid:6)on Informa(cid:6)on technology Biodiversity Indigenous Peoples & Na(cid:6)ve Title Diversity Innova(cid:6)on Greenhouse gas emissions & energy Extremely important S t a k e h o d e r s l Less important Ramelius Resources Extremely important RAMELIUS RESOURCES ANNUAL REPORT 2021 39 SUSTAINABILITY REPORT (CONTINUED) ESG reporting agencies, benchmarking and memberships Ramelius has recently started participating in ESG benchmarking assessments undertaken by organisations such as S&P Corporate Sustainability Assessment (CSA) and MSCI and through membership of leading industry bodies. In FY21 we continued to improve the scope and transparency of our disclosures and received an improved rating of ‘BBB’, up from a ‘BB’ in the MSCI ESG Ratings assessment for resilience to long- term ESG risks. We have also for the first time participated in the S&P CSA from which the Dow Jones Sustainability Index is compiled from. Together with our commitments, partnerships and stakeholder feedback, these assessments and memberships allow us to track our ESG performance against relevant standards and peers to deliver continual improvement. OUR BUSINESS Health, Safety & Wellbeing: 20% REDUCTION IN TOTAL RECORDABLE INJURY FREQUENCY RATE Employment & Contractors: 45% OF GRADUATE PROGRAM MEMBERS WERE FEMALE Talent attraction, development and retention: TALENT STRATEGY ALIGNED WITH A STREAMLINED ONBOARDING PROCESS; GROUP TURNOVER MEASURED AT 14.9% 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 would limit our capacity to 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 through partnerships within regions to generate jobs. I I Y T L B A N A T S U S I T R O P E R 40 RAMELIUS RESOURCES ANNUAL REPORT 2021 SUSTAINABILITY REPORT (CONTINUED) 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 FY21. 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. • Workplace Gender Equality Agency (WGEA): an Australian Government statutory agency charged with promoting and improving gender equality in Australian workplaces. • • National Greenhouse and Energy Reporting (NGER): the national framework for reporting and disseminating company information about greenhouse gas emissions, energy production and energy consumption. 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. RAMELIUS RESOURCES ANNUAL REPORT 2021 41 SUSTAINABILITY REPORT (CONTINUED) 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. From FY21, we follow the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations: 4th 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. 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 website. Board of Directors Risk & Sustainability Committee Audit Committee Nomination & Remuneration Committee CEO Operations Finance & Business Development Exploration Corporate We updated our governance and sustainability policies in FY21, including our committee charters and our Whistleblower Policy, and issued our first Modern Slavery Statement, which outlines our approach and management of the risk of modern slavery across our operations. I I Y T L B A N A T S U S I T R O P E R 42 RAMELIUS RESOURCES ANNUAL REPORT 2021 SUSTAINABILITY REPORT (CONTINUED) 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 FY21 a new project was initiated to create a best practice risk management framework, called Ramelius Essentials. It is a multi-year endeavour and we are pleased that development and implementation have progressed according to plan. The Essentials Program focuses on integrating our approach to managing the fundamental requirements for our business which are to: • • • • maintain and apply good standard practices for controlling our activities understand and effectively manage key risks across our business learn, share and take action from these learnings comply with the requirements of laws impacting our business • maintain a safe system of work Assurance Internal Control Business Continuity Risk Management Ramelius Essentials Sustainability Compliance Health & Safety • • • operate in accordance with industry sustainability principles remain resilient in the face of adverse and extreme events constantly monitor and review our activities and performance 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, productivity improvement and waste reduction. Ramelius 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. CASE STUDY 1: CSIRO Research 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). An exciting outcome of this project will comprise a toolkit of exploration insights and workflows to support the operation of mineral exploration companies in all stages of the exploration process including selection of tenements, exploration workflows, the planning of new exploration campaigns, and better prioritisation of targets. The three year project is aimed at re-evaluating the prospectivity of the South West Terrane of the Yilgarn through application of recent advances in geochemical technologies, targeting chemical and isotopic anomalies in cover rocks that have been proven to provide vectors to mineralisation in the more thoroughly explored central and eastern terranes of the Yilgarn. 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. Ramelius is supporting innovative research into mineral exploration being undertaken by Australia’s national science agency the Commonwealth Scientific and Industrial Research Organisation (CSIRO). RAMELIUS RESOURCES ANNUAL REPORT 2021 43 SUSTAINABILITY REPORT (CONTINUED) OUR PEOPLE Health, safety and wellbeing: 20% REDUCTION IN TOTAL RECORDABLE INJURY FREQUENCY RATE Employment and contractors: 45% OF GRADUATE PROGRAM MEMBERS WERE FEMALE Talent attraction, development and retention: TALENT STRATEGY ALIGNED WITH A STREAMLINED ONBOARDING PROCESS; GROUP TURNOVER MEASURED AT 14.9% Ramelius recognises that employees are 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: • An absolute commitment to harm minimisation and reduction starting from the Board and leadership, top down through the whole Ramelius business Fostering a culture that promotes workplace health and safety in the best interests of all participant 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 Complying with legislation and standards relating to health and safety in the workplace • • • • • In FY21, Ramelius achieved safety frequency rates of 14.98 for Total Recordable Injury Frequency Rate (TRIFR) and 4.08 for Lost Time Injury Frequency Rate (LTIFR). Pleasingly both are significantly reduced from FY20, though we know we still have a lot of work to do. In FY22, 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. Management of health and safety is a line management responsibility with system and process support 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 management of health and safety data including onboarding compliance, incident reporting, investigation actions and outcomes and training records. The Learning Management System (LMS) module, added to Ramelius’ INX system in 2020 has improved onboarding processes and site access compliance and continues to be developed for online learning of procedures and other training requirements. I I Y T L B A N A T S U S I T R O P E R 44 RAMELIUS RESOURCES ANNUAL REPORT 2021 SUSTAINABILITY REPORT (CONTINUED) Health and wellbeing Ramelius takes a proactive approach to the health and wellbeing 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. The Ramelius medical services provider OccuMed, has continued to deliver a comprehensive service for the business. The new operations at Tampia and Penny have been able to set up with site facilities and systems rapidly due to the relationship that is now well established with OccuMed. Partnering with 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 Poisons Permit Licence Holder To ensure our personnel are fit for the role that they are employed to do, in FY21 we also created a further 9 Job Role Profiles (JRP). This approach ensures that all new recruits and contractors are now medically assessed against the correct JRP before being employed. This ensures they are physically and mentally fit for the required activities to fulfil the role. COVID-19 response 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 FY21, there was no material impact on the Ramelius 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 Australian Government Health Department, the Government of Western Australia Health Department and Department of Mines, Industry Regulation and Safety. Our medical service provider OccuMed has provided us with a high level of support during the COVID-19 pandemic. RAMELIUS RESOURCES ANNUAL REPORT 2021 45 SUSTAINABILITY REPORT (CONTINUED) 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 employee and contractor team members. During FY21 we conducted three Certificate III in Mine Emergency Response and Rescue courses with a total of 60 people from five of our operational sites completing the course. The overall growth in trained ERT members at all the Ramelius sites provides an increased level of confidence in response capability and capacity at all times. I I Y T L B A N A T S U S I T R O P E R 46 RAMELIUS RESOURCES ANNUAL REPORT 2021 SUSTAINABILITY REPORT (CONTINUED) Employment and contractors Diversity and equal opportunity Ramelius supports and promotes a working environment which values equity and diversity. As outlined in our Diversity Policy, Ramelius is committed to the recruitment of the best candidates regardless of gender, religion, cultural background or marital status and values the contribution of all employees across the organisation. Our Diversity Policy together with our Code of Conduct 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. To support our commitment, Ramelius have developed a Gender Diversity & Inclusion Strategy which articulates the targets of year-on-year improvement in gender diversity across the group and within leadership roles. Regular overall gender pay gap and like for like remuneration analysis allows outcomes to be reviewed and measured. Further information is provided in our Diversity Policy and 2021 Workplace Gender Equality Public Report. Key diversity metrics in FY21 20% of our Board of Directors are female 19% of leadership are female 25% of new hires in FY21 were female 45% of graduate program members 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 was published in 2021 and covers 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. 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. In FY21 Ramelius reviewed our values to align with our unique culture which is underpinned by a ‘fit-for purpose and can-do’ attitude. Through reviewing employee feedback, we have launched our new values as part of Ramelius Essentials. Our new values are: • We Empower our people • We achieve Fit-for-Purpose outcomes • We Deliver and do it safely • We are Authentic 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 ethics 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 RAMELIUS RESOURCES ANNUAL REPORT 2021 47 SUSTAINABILITY REPORT (CONTINUED) Whistleblowing In FY21, Ramelius have introduced an external whistleblower platform with YourCall to enable all directors, employees, prospective employees, contractors, consultants and external stakeholders to raise disclosable matters with the option to remain anonymous. This is in accordance with the whistleblower protections outlined in the Corporations Act 2001 (Corporations Act) which were expanded to provide greater legal rights and protections for whistleblowers as regulated by the Australian Securities & Investments Commission (ASIC). Talent attraction, development and retention Developing and rewarding our people We provide opportunities and support to employees to improve their skills, knowledge and qualifications as required for the performance of their role and for improving their prospects of promotion to other internal roles. Informal annual performance reviews were conducted for all employees in FY21. 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 benchmarked against internal relativities and industry data. 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 with options of open pit, underground and exploration environments. In FY21, we have two apprentices and eleven graduate students, five of whom are female. These programs are designed to support, challenge and reward employees 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. Kent Street High School (CoRE Foundation program) students inspecting core samples at Edna May. CASE STUDY 2: Bob Kennedy Scholarship “I was born in Perth and hope to build a long term career in mining in WA after I graduate. I am keen to bring my life experiences and academic background to a new employer, gain in depth knowledge of the industry and to make my mark as a young woman making a valuable contribution in the workplace.” 2021 scholarship recipient Sophie Haynes - Bachelor of Commerce (Finance and Human Resources) 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. I I Y T L B A N A T S U S I T R O P E R 48 RAMELIUS RESOURCES ANNUAL REPORT 2021 SUSTAINABILITY REPORT (CONTINUED) OUR COMMUNITIES Indigenous and native title: TWO INDIGENOUS DEVELOPMENT PROJECTS Taxes, royalties and supplier payments: A$530m CONTRIBUTED TO AUSTRALIAN ECONOMY Community relations and investment: CONTRIBUTED OVER $450,000 TO COMMUNITY ORGANISATIONS Shine Inspire Achieve Belong students touring the Mt Magnet operation 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. School children from the Mt Magnet Shine Program Indigenous and native title Native titleholders and indigenous communities 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 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. RAMELIUS RESOURCES ANNUAL REPORT 2021 49 SUSTAINABILITY REPORT (CONTINUED) Taxes, royalties and supplier payments 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 FY21, we contributed over $530 million to the Australian economy through the following mechanisms: • Goods & services: $399.2 million • Wages: $50.2 million • Taxes: $37.2 million • Royalties: $23.1 million • Dividends: $16.2 million • • Interest: $0.4 million State and shire rent: $3.0 million • Community contributions and donations: over $450,000 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 FY21 we engaged local community stakeholders throughout our local Shires in which we operate. Our most recent project Tampia Gold Mine, we established a Community Benefit Fund. The purpose of the fund is to provide grants to Narembeen community groups for programs and/or community infrastructure. This fund represents a future-focussed partnership between the Shire of Narembeen, Ramelius Resources and the Go Narembeen Progress Association. 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 within the communities, as well as aligning with our business priorities. In FY21, we donated approximately $450,000 to support initiatives and groups seeking to build lasting, positive community impact. We also made $11,000 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 CoRE Foundation Merredin Program, the MACA Cancer 200 Challenge, Netball WA, Royal Flying Doctor Service, Fortuna Foundation Positive Spin Project, 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 Case Study below which includes a snapshot of grants provided to local community groups. 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 $360,000 over the last 6 years. In FY21, 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 • I I Y T L B A N A T S U S I T R O P E R 50 RAMELIUS RESOURCES ANNUAL REPORT 2021 SUSTAINABILITY REPORT (CONTINUED) 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 & 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; 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; Foodbank WA Community Kitchen Mega Meal Challenge; 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); GIG’s annual Women in Gold Great Diversity Debate in Perth, Sydney and Melbourne which promotes gender diversity in the Australian gold mining industry; Gold tourism initiatives and businesses to drive 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. • • • • • • Ramelius staff at Foodbank WA where the team made almost 1,200 meals for those in need. CASE STUDY 5: CoRE Foundation wheatbelt hub Ramelius is proud to sponsor the CoRE program at Merredin College. This new program is focused in the greater Wheatbelt region of WA, extending from Ravensthorpe in the south, Northampton in the north and to the northern Goldfields in the east. The CoRE program’s vision is to ‘imagine a better future where life- long learning is unleashed in the classroom.’ This classroom is known as #therealclassroom, where industry practices are embraced by the students, and students are taken out into the real world to network with industry professionals. The program at Merredin College is focused on 60 primary students from Years 5 & 6, 28 students from Years 7 & 8 and 32 students from Year 10. Managing Director, Mark Zeptner said ‘’It’s great to be giving back at a local level in the greater Wheatbelt region of WA, supporting primary and secondary students, and giving them the opportunities for real world experiences at our mine sites. Hopefully this will motivate and engage students to take a career pathway into the resources sector in the future’’. The next generation of miners from Kent Street High School Year 12 CoRE program at the Edna May mine. RAMELIUS RESOURCES ANNUAL REPORT 2021 51 SUSTAINABILITY REPORT (CONTINUED) CASE STUDY 6: Royal flying doctor service Hamilton T1 Ventilator installed into RFDS aircraft Ramelius is proud to sponsor the Royal Flying Doctor Service WA. Western Australia is a vast and remote state and making sure people across the regions have access to health care and emergency, life- saving treatment is what they do at the Royal Flying Doctor Service Western Operations. Our three-year commitment has seen our funding go towards the purchase of a new Hamilton T1 Ventilator for their aircrafts, to ensure patients receive the very best care, particularly with the pressures of COVID 19. CASE STUDY 7: Fortuna foundation positive spin project The launch of the new Fortuna Foundation Positive Spin washing van. Fortuna Foundation is a registered Australian Charity with a core vision to inspire the community to help the less fortunate than ourselves, stand amongst them at their darkest of times, and not give up until together, a difference is made. Further, they aim to help alleviate poverty amongst children, homeless, sick, aged and disabled people. Their most recent project, of which Ramelius are a major sponsor of, The Positive Spin Van, will endeavour to close the gap that currently exists in the community, by providing free mobile laundry services to the homeless and disadvantaged people of Perth and surrounding areas. The van will be parked at partnering Churches and Community centres at designated times, with free soup, biscuits and food being served by various community organisations, while the washing cycles are in progress. Local community employment Ramelius actively engages with our local communities for employment opportunities and have seen the benefits and rewards. The new Tampia Gold Mine commenced operations in June 2021 and very pleasingly has a current local workforce of 33%. This includes the Mine Manager who relocated to Narembeen to be a part of the local community. Another pleasing achievement is a local Badimia, Wadjarri and Yued woman and Ramelius employee at the Mt Magnet Gold Mine, Sharna Whitehurst. Sharna commenced as a Receptionist in October 2018 and was supported to undertake training in Human Resources. She has balanced remote study with her site-based role and upon completing a Certificate IV in Human Resources Management was given the opportunity to take on a newly created Human Resources Officer role reporting directly to Liz Jones, General Manager. The new mining camp at Narembeen to support the Ramelius Tampia Gold Mine. “Sharna has been an amazing influence on the site from the beginning. Her positive attitude is unshakable and Sharna quickly became a go to person. Being local and indigenous Sharna also helped us better understand how to work with the local community. It was Sharna’s idea to do the hampers for the elderly in Mount Magnet. I get a lot of positive feedback from the town over the hampers, and I think people really look forward to them. Sharna is also a big driving force behind our involvement in the Shine Program.” General Manager Mt Magnet Gold Mine, Liz Jones Human Resources Officer Sharna Whitehurst I I Y T L B A N A T S U S I T R O P E R 52 RAMELIUS RESOURCES ANNUAL REPORT 2021 SUSTAINABILITY REPORT (CONTINUED) OUR ENVIRONMENT Water: 13.5% OF WATER RECYCLED Emissions and energy: COMPLETED FIRST PHASE OF TCFD ALIGMENT FOR CLIMATE RISK EMISSIONS INTENSITY REDUCED 8% Waste, effluents, air pollution: WASTEWATER TREATMENT AT TAMPIA USING WASTEWATER FOR IRRIGATION 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 to meet 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 are collated annually across our operations and verified by third party auditors. Ramelius began formal reporting on sustainability in FY20 when baseline environmental monitoring processes were established. This assisted the company in measuring our environmental performance and enabled 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 FY21, we abstracted a total 6,009ML of raw (saline) water for all our sites which is up from last years’ abstraction volume of 3,551ML. A large percentage of this increase was due to unexpected, higher volumes of water needing to be dewatered from underground at the Vivien Gold Mine in which a licence increase was sought. All water abstracted from the Vivien Gold Mine was pumped to a third party, adjoining gold mine under RAMELIUS RESOURCES ANNUAL REPORT 2021 53 SUSTAINABILITY REPORT (CONTINUED) agreement for use in their process plant. An additional 934ML of wastewater was reused at Ramelius’ two processing plants; sourced from the TSF’s. 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. 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. In FY22, 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. Emissions and energy 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). This year, we sourced a total 1,995,582 GJ of electricity from the grid and diesel generation (a 9% increase on last year). During the same period, our total Scope 1 and 2 emissions was 153,365 t CO2-e (a 9% increase on last year, but an 8% decrease in emissions intensity i.e., emissions per unit of production). These increases are in line with the growth of the company, with new greenfields projects being commenced and expansion activities at existing sites. In FY22, we will continue to focus on improving efficiencies in consumption rate across all of our operations. GHG Emissions (t CO2-e) Scope 1 Scope 2 Total Scope 1 and 2 Emissions intensity (gold produced) Energy (GJ) Energy consumed Net energy consumed Energy produced FY2021 FY2020 Change 112,501 40,865 153,365 0.56 105,215 35,227 140,442 0.61 2,253,720 1,995,582 258,138 2,073,976 1,847,953 226,023 7% 16% 9% 8% 9% 8% 14% I I Y T L B A N A T S U S I T R O P E R 54 RAMELIUS RESOURCES ANNUAL REPORT 2021 SUSTAINABILITY REPORT (CONTINUED) Climate risk and the TCFD One of the key topics for both Ramelius and relevant stakeholders is climate-related risk and the transition to a low-carbon economy. With the increasing global spotlight and this year’s IPCC report emphasising the need for action on climate, Ramelius has begun its journey to report against the Task Force on Climate-related Financial Disclosures (TCFD) framework. The TCFD framework is structured around four headline areas: governance, strategy, risk management, and metrics and targets. The four recommendations will be implemented in a multi-year roadmap with initial disclosures for the governance section outlined below. Governance Board oversight Management’s role Strategy Climate-related risks and opportunities over short, medium, long- term Impact on business, strategy and financial planning Resilient strategy and scenario analysis Risk Management Processes for identifying Metrics and Targets and assessing risks Metrics Processes for managing risks Integration into overall risk management Scope 1, 2 and 3 emissions and related risks Targets The Risk & Sustainability Committee and senior management will then identify potential next steps for strengthening risk mitigation to reduce the residual risk rating over time, this will include setting emissions reductions targets. Ramelius board oversight of climate-related risk The Ramelius Board sets strategic direction and defines strategic objectives coupled with defined levels of risk tolerance. The Board also enacts policies that are relevant to the Company’s management of climate-related risk, sustainability and other key topics. The Board has delegated responsibility to oversee the Company’s risk management systems, sustainability programs and mitigating controls to the Risk & Sustainability Committee. This Committee is comprised of Independent Non-Executive Directors, including the Chairperson, and the CEO, and is appointed by the Board on whose behalf it acts. The Committee reports to the Board a minimum of four times per year on risk management, HSE and sustainability activities. The Committee periodically reviews company-wide policies and initiatives related to HSE and risk management , with a view to ensuring effective and suitable risk management strategies are in place. The Risk & Sustainability Committee oversees the management of specific climate-related risks and opportunities through regular review of global best practice, internal compliance programs and relevant sustainability frameworks. FY21: Gap analysis and benchmarking current TCFD governance disclosures In FY21 the Board approved the adoption of the TCFD Recommendations. Ramelius, in conjunction with Futureproof (a specialist ESG consultancy): • • • Completed a benchmarking exercise against gold industry peers to set a baseline reference point for Ramelius’ actions and disclosures in relation to climate-related risks and opportunities Conducted a gap analysis between the TCFD required governance disclosures, and Ramelius’ existing governance and risk management processes Considered the peer review and gap analysis, enabling the Board and senior management to understand the relative maturity of disclosures by Ramelius and its peers, and to develop an action plan towards adopting the TCFD Recommendations over the coming years. FY22: Identify and validate physical and transitional risks In FY22 the company will identify and validate the key physical (acute and chronic) and transitional risks (market shifts, reputational risks, technology changes, regulatory and policy changes and legal risks) to Ramelius’ business during a climate workshop involving the Risk & Sustainability Committee and senior management. FY23: Scenario planning and inherent risk rating and mitigation In FY23, a second workshop will assess the potential consequences and likelihoods of the events identified occurring over long-term time horizons for the company’s operations. This will use scenario planning as outlined in the TCFD guidelines and assess current mitigating practices and controls. RAMELIUS RESOURCES ANNUAL REPORT 2021 55 SUSTAINABILITY REPORT (CONTINUED) Role of Ramelius management of climate-related risk At a management level, the Ramelius Leadership Team, led by the CEO, is tasked with fulfilling Board-approved strategies and policies and associated risk management plans. Management, via the CEO, reports progress and activities to the Risk & Sustainability Committee at each meeting. The Group Environment Manager provides central coordination through to the Leadership Team and CEO. At a site level, risk registers include risks and mitigation plans at all operations. Senior Managers prepare an annual Sustainability Report for endorsement by the Risk & Sustainability Committee and approval by the Board. In FY21 a new risk management program, Ramelius Essentials, was adopted by the Board to support the objective of being a sustainable gold producer focused on delivering superior returns for stakeholders. The new risk management program is being introduced by Senior Managers across all functions to ensure strategic risk management is embedded in our decision making at every level of the company. 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. 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. 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 8 Wastewater Recycling at Tampia. 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 CASE STUDY 8: Wastewater recycling at Tampia Climate change has seen rainfall in the Southwest of Western Australia become more unreliable. This combined with population growth has placed a great deal of pressure on existing traditional sources of water for domestic, industrial and agricultural use. Recognising these pressures on our natural resources, Tampia Operations no longer considered wastewater a ‘waste’ product to be discarded but a resource that can have potential value if used in a ‘fit for purpose’ manner if recycled. The company took advantage of this sustainability opportunity at its Tampia Village, north of the town of Narembeen where the wastewater treatment plant (WWTP) services the village’s 120 rooms of the staff and contractors employed by the Tampia project. The scheme uses excess treated water from the Tampia Village WWTP to irrigate the trees and gardens of the village, conserving high quality water for drinking and other specialised high value uses. Wastewater is treated to Class C standards that are suitable for reuse in low-risk category applications, with the option available to upgrade the system to Class A standards. Using an Activated Sludge Bioreactor, wastewater is treated to a quality safe for this purpose and includes the use of an enhanced nutrient removal system to lower phosphorous and nitrogen levels in the effluent. 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 Church of England Pension Board Tailings Report on our website. I I Y T L B A N A T S U S I T R O P E R 56 RAMELIUS RESOURCES ANNUAL REPORT 2021 SUSTAINABILITY REPORT (CONTINUED) 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. In FY21, each operation reviewed their approved Mine Closure Plan and Ramelius conducted a 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. An independent external review of closure cost provisioning will be undertaken in FY22. During FY21, Ramelius had a total tenement land holding package of 341,321 hectares, of which land disturbed by mining totalled just 1,960 hectares (0.57%). The amount of land currently under rehabilitation, which includes land that has been fully rehabilitated and relinquished, is 687 hectares which equates to 35% 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. All Ramelius baseline biodiversity study reports are submitted to environmental regulators during the mining project permit application process. The information contributes to the Western Australian environmental and biodiversity datasets which provide a broader decision-making base for regulators, an expanded knowledge base of the State flora and fauna, and improved availability of environmental information for the community to create better environmental outcomes for the State. Rows of Eucalyptus salmonophloia (Salmon Gum) seedlings before being planted at Edna May Gold Mine. Ramelius General Manager Edna May Gold Mine, Tim Blyth planting a Eremophila seedling for rehabilitation. RAMELIUS RESOURCES ANNUAL REPORT 2021 57 SUSTAINABILITY REPORT (CONTINUED) PERFORMANCE DATA Safety Safety performance Employee fatalities Contractor fatalities 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) FY20 - - 18.61 7.24 14 22 21 FY21 - - 14.98 4.08 10 23 18 Change - - - 20% - 44% - 29% 5% - 14% Number of ERT members Total Mt Magnet Edna May 32 14 Viven 18 Marda 5 Tampia 6 Penny 2 People Diversity Organisational Level FY21 Number # Percentage % Board M 4 80% F 1 20% Executive/ GM Senior Managers/ Managers Professional Trade Operator/ Technicians Admin Graduate/ Apprentice TOTAL M 6 86% F 1 14% M 66 80% F 16 20% M 45 80% F 11 20% M 39 100% F - - M 77 91% F 8 9% M - - F 14 100% M 8 62% F 5 38% M 245 81% F 56 19% Site profile FY21 Number # Percentage % New Employees FY21 Number # Percentage % Turnover FY21 Total (12 month rolling average) - voluntary exits only Corporate Mt Magnet Edna May Vivien Marda Tampia Penny Exploration TOTAL M 26 68% F 13 32% M 84 82% F 19 18% M 85 90% F 9 10% M 6 55% F 5 45% M 10 91% F 1 9% M 10 71% F 4 29% M 5 71% F 2 29% M 19 87% F 3 13% M 245 81% F 56 19% Corporate Mt Magnet Edna May Vivien Marda Tampia Penny Exploration TOTAL M 13 68% F 6 32% M 20 71% F 8 29% M 12 75% F 4 25% M 2 67% F 1 33% M 2 67% F 1 33% M 7 70% F 3 30% M 5 83% F 1 17% M 11 100% F - - M 72 75% F 24 25% 14.90% Environment Environmental compliance and incidents Monetary value of significant fines ($A) FY21 environmental Incidents Total volume of significant spills (ML) - - - I I Y T L B A N A T S U S I T R O P E R 58 RAMELIUS RESOURCES ANNUAL REPORT 2021 SUSTAINABILITY REPORT (CONTINUED) SUSTAINABILITY REPORT (CONTINUED) PERFORMANCE DATA (continued) Energy Energy consumption (GJ) Energy consumed Net energy consumed Energy produced Total energy intensity (GJ per ounce of gold produced) 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) Total emissions intensity (t CO2-e per ounce of gold produced) FY20 2,073,976 1,847,953 226,023 9.00 FY20 105,215 35,227 140,442 0.61 FY21 2,253,720 1,995,582 258,138 8.28 FY21 112,501 40,865 153,365 0.56 Change 9% 8% 14% -8% Change 7% 16% 9% -8% 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. (1) Scope 1 refers to emissions produced directly by operations, primarily resulting 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. Water Water withdrawal Surface (ML) water Bore water - saline (ML) Total water withdrawal Recycled (ML) % Total reused Waste Mineral waste Waste material mined (kt) Total ore processed (kt) FY20 3,551 3,551 677 19% FY20 20,568 4,235 FY21 6,009 6,009 934 16% FY21 28,869 4,629 Change 69% 69% 38% -18% Change 40% 9% Tailings Asset Number of active TSF Number of inactive TSF Construction Type (eg Downstream, HDPE Lined, Upstream, IWL) Mt Magnet 1 4 Upstream Edna May 1 - IWL Acid-generating seepage Asset Predicted to occur Actively mitigated Under treatment or remediation Rehabilitation and closure Land management (ha) Land disturbed Land rehabilitated Sites with protected conservation status All Sites - - - FY20 1788 583 - FY21 1960 687 - Change 10% 18% - RAMELIUS RESOURCES ANNUAL REPORT 2021 59 SUSTAINABILITY REPORT (CONTINUED) PERFORMANCE DATA (continued) Social responsibility Socioeconomic contribution (A$) million Operations Employees Payments to providers of capital Payments to financial Payments to government Region Supplier payments (Goods and services) Wages Dividend payments to share-holders Interest Taxes Royalties State and Shire Rent Total cont- ribution Local suppliers, rates & employees National economy (exluding local suppliers & employees) Total 3.6 396.1 399.7 3.6 46.6 50.2 - 16.2 16.2 - 0.4 0.4 - 37.2 37.2 - 23.1 23.1 3.0 - 3.0 10.2 519.6 529.9 Economic contribution Contributed into Australian Economy (A$) million Direct spend with community organisations (A$) million Reconciliation to income tax payable* Profit before income tax expense Permanent differences Temporary differences: –  Accounting and tax depreciation differences –  Mine development –  Exploration and evaluation expenditure –  Provisions –  Other Taxable income before utilisation of carried forward tax losses Australian income tax payable Corporate income tax paid during the year ended June 2020 Utilisation of carried forward losses Net income tax payable/(receivable) Community and cultural heritage Material Cultural Heritage incidents Material Community Impact incidents FY20 476.1 8.2 FY21 529.9 10.2 30 Jun 2021 (A$) million 174.7 1.1 (4.5) (13.9) (8.0) 0.8 (11.0) 139.1 41.7 (3.9) (7.5) 30.3 FY20 - - FY21 - - I I Y T L B A N A T S U S I T R O P E R 60 RAMELIUS RESOURCES ANNUAL REPORT 2021 ANNUAL FINANCIAL REPORT for the year ended 30 June 2021 RAMELIUS RESOURCES ANNUAL REPORT 2021 61 CONTENTS 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 62 62 62 62 62 62 62 63 66 67 67 68 70 72 72 82 82 82 82 82 82 83 84 85 89 132 132 Independent auditor’s report to the members 133 T R O P E R L A C N A N I F I 62 RAMELIUS RESOURCES ANNUAL REPORT 2021 DIRECTORS’ REPORT Your Directors present their report on the consolidated entity consisting of Ramelius Limited and the entities it controlled at the end of, or during, the year ended 30 June 2021. 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 Limited during the financial year: Mark Zeptner Kevin Lines David Southam Bob Vassie Michael Bohm Natalia Streltsova The above named Directors held office during the whole of the financial year, and up to the date of this report, except for: • • Bob Vassie – appointed 1 January 2021 Kevin Lines – retired 30 September 2020 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 mine operations and the production and sale of gold, mine development and exploration. There were no significant changes to those activities during the year. Key highlights for the year A review of the Group’s key highlights for the year is discussed in the ‘Key Operational Highlights for the Year’ section of this Annual Report which commences on page 2. Dividends Dividends recommended but not yet paid Since the end of the 2021 financial year the Directors have recommended the payment of a fully franked final dividend of 2.5 cents per fully paid share. The fully franked final dividend will have a record date of 2 September 2021 and a payment date of 4 October 2021. The financial effect of the final dividend has not been brought to account in the financial statements for the year ended 30 June 2021 but will be recognised in subsequent financial reports. Dividends paid Final ordinary dividend for the 2020 financial year of 2 cents (2020: 1 cent) per fully paid share paid on 2 October 2020 Table 6: Dividends paid to members during the 2021 financial year 2021 $M 16.2 2020 $M 6.6 Events since the end of the financial year In August 2021 a binding agreement was executed with Liontown Resources Ltd (‘Liontown’) for the termination of the Lithium Royalty owned by Ramelius over the majority of Liontown’s Kathleen Valley Lithium Project. Consideration of $30.3 million was paid upon completion on 4 August 2021. The royalty was granted when Ramelius disposed of the Kathleen Valley Lithium – Tantalum Project to Liontown in 2016. The royalty comprised both a production component of A$0.50/tonne of ore mined and a sales component of 1% of the gross sales of the ore. There were no other matters or circumstance that have arisen since 30 June 2021 that have, or may 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 development and exploration projects for the year is discussed in the ‘Review of Operations’ section of this Annual report, which commences on page 12. RAMELIUS RESOURCES ANNUAL REPORT 2021 63 DIRECTORS’ REPORT (CONTINUED) Financial review Mt Magnet $M Edna May $M Corp & other $M 377.2 (136.7) 240.5 (85.1) (4.2) 151.2 151.2 - 151.2 - 151.2 257.1 (144.8) 112.3 (77.9) 4.9 39.3 39.3 - 39.3 - 39.3 - - - - - - (13.0) (2.7) (15.7) (48.0) (63.7) 2021 $M 634.3 (281.5) 352.8 (163.0) 0.7 190.5 177.5 (2.7) 174.8 (48.0) 126.8 2020 $M 460.6 (242.4) 218.2 (103.1) 56.1 171.2 152.5 (3.0) 149.5 (36.1) 113.4 Change $M Change % 173.7 (39.1) 134.6 (59.9) (55.4) 19.3 25.0 0.3 25.3 (11.9) 13.4 +38% +16% +62% +58% -99% +11% +16% -10% +17% +33% +12% Financial performance Revenue Cash costs of sales Gross margin excluding ‘non cash’ items Amortisation and depreciation Inventory movements Gross profit Earnings before interest & tax (EBIT) Net finance costs Profit / (loss) before income tax Income tax expense Profit / (loss) after tax Table 7: 2021 Financial performance Profit Figure 6: EBIT for the financial year ended 30 June 2021 I L A C N A N I F T R O P E R 64 RAMELIUS RESOURCES ANNUAL REPORT 2021 DIRECTORS’ REPORT (CONTINUED) The Group reported an EBIT of $177.5 million and net profit after tax (NPAT) of $126.8 million for the financial year ended 30 June 2021, a 16% and 12% increase respectively from the prior year (2020: EBIT $152.5 million and NPAT of $113.4 million). The Mt Magnet operations reported an EBIT of $151.2 million, a 13% increase from the prior year (2020: $134.4 million), primarily due to a higher gold price being realised. The benefit of this higher gold price was offset in part by higher operating costs, this is discussed further below. At Edna May an EBIT of $39.3 million was reported representing a 7% increase on the prior year (2020: $36.8 million). This increase was driven by the higher gold production and higher realised gold price for the year. These benefits were offset by higher operating costs driven by the changing ore sources at the Edna May operation (discussed further below). Revenue Revenue for the year ended 30 June 2021 increased by 38% to $634.3 million compared to $460.6 million for the prior year. This has been achieved by a 22% increase in gold ounces sold (2021: 277,450oz / 2020: 228,210oz) and a 13% increase in the realised gold price (2021: $2,282/oz / 2020: $2,014/oz). The total gold sold of 277,450oz included deliveries into the hedge book of 127,850oz at a realised gold price of $2,037/oz and remaining spot sales of 149,600oz at a realised gold price of $2,492/oz. As at 30 June 2021 the Group’s hedge book totalled 206,000oz at a price of $2,335/oz representing a 17% decrease in ounces committed and 9% increase in price (2020: 247,350oz at $2,135/oz). EBIT – Mt Magnet Whilst the EBIT at Mt Magnet has increased on the prior year, the cost per tonne milled also increased which in part reduced the benefit of the higher realised gold price. The operating cost per tonne increased on the prior year in line with more tonnes being sourced from the underground mines and Stellar open pit, all of which were higher cost, but importantly were also higher grade. To a lesser extent, Eridanus costs were higher than the prior year, although this is due to Eridanus being a very low cost mine in 2020 due to shallow operations and a positive Ore Reserve reconciliation in that year. Despite a slightly lower grade profile from the bulk open pits in 2021, the higher proportion of underground material meant the head grade through the mill remained largely unchanged. The resulting cost per ounce at Mt Magnet increased $210 per ounce to $1,370 per ounce for the 2021 financial year, however the EBIT margin per ounce increased 11% on the prior year to $912/oz (2020: $819/oz) due to the higher realised gold price. EBIT – Edna May Gold production from Edna May increased 75% on the prior year resulting in the EBIT increasing to $39.3 million. The free carry low grade ore feed in 2020 at Edna May, which made up 81% of the feed in that year, was replaced in 2021 by ore from the higher grade Greenfinch and Marda open pits. This changed the cost profile of the operation with the cost per tonne increasing on the prior year. The impact of this cost increase was more than offset by the 34% increase in grades from the prior year to 1.33g/t (2020: 0.99g/t) with the resulting costs being slightly higher than the prior year. EBIT – Corporate & other Other expenses, which include corporate costs, were up 6% on the prior year to $21.3M (2020: $20.0M). Excluding exploration impairment charges other expenses equated to $59 per ounce sold which is in line with the prior year (2020: $60 per ounce sold). During the year Ramelius disposed of non core projects and royalties including the First Hit Project ($1.0 million), the Spargo Royalty over Wattle Dam ($3.0 million), the Coogee JV ($1.0 million) and Western Queen ($1.0 million). Other amounts included within other income related to the fair value adjustments on ASX listed investments held. Income tax The effective tax rate for the Group for the year ended 30 June 2021 was 27% compared to 24% for the prior year. The effective tax rate is lower than the statutory 30% rate as the Group recognised, and utilised in full, a $3.9 million one off tax benefit on the unused tax losses transferred from Spectrum Metals Limited. The prior year was reduced with the Group recognising a $10.1 million one off tax benefit on the unused tax losses of Tampia Operations Pty Limited (formerly Explaurum Operations Pty Limited). This is discussed further in Note 3 to the financial statements. RAMELIUS RESOURCES ANNUAL REPORT 2021 65 DIRECTORS’ REPORT (CONTINUED) Balance sheet The net assets of the Group increased 23% to $635.8 million over the year (2020: $515.2 million) as a result of strong operational cash flows and development of the Tampia and Penny Gold Mines. Importantly, and further strengthening our balance sheet, has been the 90% increase in the working capital (current assets less current liabilities) over the year to $212.8 million (2020: $111.8 million) as shown in the chart below. Figure 7: Working capital movement over the year to 30 June 2021 Assets The increase in current assets of 23% to $332.7 million (2020: $270.9 million) was the result of cash generation (see comments below) and minor increases in inventories. As at 30 June 2021 the Group had over 2.1 million tonnes of ore stockpiled (excluding low grade stockpiles) with a total of over 72,000 ounces in contained gold, gold in circuit, and bullion on hand (2020: over 2.4 million tonnes and 92,000 ounces of gold). Non current assets increased 6%, or $29.6 million on the prior year in line with the development of the Tampia and Penny Gold Mines. Liabilities Current liabilities were $119.9 million at 30 June 2021 (2020: $159.2 million) principally due to the repayment in full of the borrowings as well as a reduction in trade and other payables (relates in part to the payment of stamp duty on the Spectrum Metals Limited (Penny Gold Mine) acquisition). These items were offset by a $9.1 million increase in the income tax payable resulting from the increased profitability and smaller pool of available tax losses. Non current liabilities increased to $90.6 million predominantly due to an increased deferred tax liability (DTL). The DTL increased in line with exploration and development expenditure and utilisation of previously recognised tax losses. Cash flows Cash provided by operating activities of $305.6 million were up 29%, or $69.6 million, on the prior year despite $24.6 million of income tax paid during the year. This has been achieved from the receipt of an additional $167.8 million in revenues from increased production and gold price, offset in part by the accompanying increase in operating expenditure from the higher throughput and material movement in the year. Cash used in investing activities was $12.5 million higher than the prior year as a result of higher capital expenditure due to the development of the Tampia and Penny Gold Mines. A total of $165.5 million was reinvested into the business, including: • • • Payments for the development of open pit and underground mines of $111.5 million; Payments for property, plant, and equipment, at both existing and new sites, of $40.3 million; and Payments for tenements and exploration of $13.7 million. I L A C N A N I F T R O P E R 66 RAMELIUS RESOURCES ANNUAL REPORT 2021 DIRECTORS’ REPORT (CONTINUED) DIRECTORS’ REPORT A total of $59.5 million was used by financing activities in the year, predominantly relating to the repayment of borrowings, leases, and dividends paid to shareholders. The underlying cashflow of the business (as shown below) was $148.2 million (2020: $83.7 million) with the increased cash flow generation of the business being attributable to the increased gold production. Figure 8: Movement in cash for the year ended 30 June 2021. Cash and gold at 30 June 2021 totalled $234.0 million (2020: $185.5 million) comprising cash and cash equivalents of $228.5 million (2020: $165.7 million) and gold on hand of 2,341 ounces (2020: 7,681 ounces). Financial risk management Ramelius held forward gold sales contracts at 30 June 2021 totalling 206,000 ounces of gold at an average price of A$2,335 per ounce over a period to March 2023. This compared to 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. The hedge replacement percentage for the year equated to 68% with only selective additions to the hedge book. This approach resulted in the average price of the forward gold sales contracts increasing by 9% over the year and the level of committed ounces reducing by 17%. 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. RAMELIUS RESOURCES ANNUAL REPORT 2021 67 DIRECTORS’ REPORT (CONTINUED) DIRECTORS’ REPORT 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: • Denver Gold Conference, Virtual, September 2020; • Diggers and Dealers, Kalgoorlie, October 2020; • Noosa Mining, Virtual, November 2020; • • • • RIU Conference, Fremantle, February 2021; Euroz Hartleys Conference, Rottnest, March 2021; Various investor mine site visits; and Various virtual investor presentations. 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). 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. Ramelius continues to operate under protocols developed internally and as prescribed by State and Federal health authorities to minimise risks to our people and communities and ensure we continue to safely produce gold during this challenging period. 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. 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 necessary. Health management: proactive temperature testing and pre commute 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 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. I L A C N A N I F T R O P E R 68 RAMELIUS RESOURCES ANNUAL REPORT 2021 DIRECTORS’ REPORT (CONTINUED) • • • • 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. 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. RAMELIUS RESOURCES ANNUAL REPORT 2021 69 DIRECTORS’ REPORT (CONTINUED) Reporting Due to the various licences and works approvals the Group holds, annual environmental reporting (for a twelve month period) is a licence and works approval condition. The Group did not experience any reportable environmental incidents for the reporting year 2020-2021. Regulatory agencies requiring annual environmental reports are outlined below but are not limited to the following: • Department of Water and Environmental Regulation • Department of Mines, Industry Regulation and Safety • Tenement Condition Report • Native Vegetation Clearing Report • Mining Rehabilitation Fund Levy • National Pollutant Inventory • National Greenhouse and Energy Reporting Scheme • Bureau of Land Management. Sustainability The Group is committed to 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. Environmental, Social, and Corporate Governance (ESG) performance is critical to maintaining our licences to operate, which in turn is fundamental to our financial performance. Details of the Group’s environmental and social performance are set out in the annual Sustainability Report and details of the Group’s governance framework and compliance are set out in the annual Corporate Governance Statement, both available at rameliusresources.com.au. I L A C N A N I F T R O P E R 70 RAMELIUS RESOURCES ANNUAL REPORT 2021 DIRECTORS’ REPORT (CONTINUED) Information on Directors The following information is current as at the date of this report. Bob Vassie B.MinTech (Hons) Mining, FAusIMM GAICD Independent Chair Non-Executive Mark Zeptner BEng (Hons) Mining, MAusIMM, MAICD Managing Director & Chief Executive Officer Michael Bohm B.AppSc (Mining Eng), MAusIMM, MAICD Independent Director Non-Executive Experience Mr Vassie is a mining engineer with 35 years multi commodity and international experience. Mr Vassie spent 18 years with Rio Tinto in global mining and resource development executive roles followed by MD & CEO positions in Ivanhoe Australia and St Barbara Ltd with a focus on executive leadership, resource development and business development including M&A. Mr Vassie served as a board member for the Minerals Council of Australia from 2014 to 2020 where he chaired the MCA Gold Forum and currently serves on the AusIMM Council for Diversity and Inclusion. Mr Vassie was appointed Non-Executive Chair on 1 January 2021. Interest in Shares and Options 80,000 Ordinary Shares Special responsibilities Chair of the Board Member of Audit Committee Member of Nomination & Remuneration Committee Member of Risk & Sustainability Committee Directorships held in other listed entities in the last three years Non-Executive Director Aurelia Metals Limited Previously Non-Executive Director Alita Resources Limited Previously Managing Director of St Barbara Limited 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 2,762,500 Ordinary Shares 500,000 Performance Rights over Ordinary Shares expiring on 11 June 2026 322,342 Performance Rights over Ordinary Shares 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 355,392 Performance Rights over Ordinary Shares vesting on 1 July 2023 and expiring on 1 July 2030 Special responsibilities Chief Executive Officer Directorships held in other listed entities in the last three years None. 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 500,000 Ordinary Shares Special responsibilities Chair of Nomination & Remuneration Committee Member of Risk & Sustainability Committee Directorships held in other listed entities in the last three years Non-Executive Chairman of Cygnus Gold Limited Non-Executive Chairman of Reidel Resources Limited Non-Executive Director Mincor Resources NL RAMELIUS RESOURCES ANNUAL REPORT 2021 71 DIRECTORS’ REPORT (CONTINUED) Information on Directors (continued) David Southam B.Comm, CPA, MAICD 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 20,217 Ordinary Shares Special responsibilities Chair of Audit Committee Member of Nomination & 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 Natalia Streltsova MSc, PhD (Chem Eng), GAICD Independent Director Non-Executive Experience Dr Streltsova is a PhD qualified Chemical Engineer with more than25 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 12,000 Ordinary Shares Special responsibilities Chair of Risk & 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 I L A C N A N I F T R O P E R 72 RAMELIUS RESOURCES ANNUAL REPORT 2021 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 2021, and number of meetings attended by each Director were: Director Bob Vassie Kevin Lines Mark Zeptner Michael Bohm David Southam Natalia Streltsova Meetings of Committees Full meetings of Directors Audit Committee Nomination & Remuneration Committee Risk & Sustainability Committee A 4 4 11 11 11 11 B 4 4 11 11 11 11 A 2 2 - 1 5 5 B 2 2 - 1 5 5 A 2 3 - 6 6 1 B 2 3 - 6 6 1 A 2 2 - 5 1 5 B 2 2 - 5 1 5 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 2021 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 Company Secretary and General Manager – Legal, HR, Risk & Sustainability. 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 Non-Executive Chair (appointed 1 January 2021) Non-Executive Chairman (retired 30 September 2020) Managing Director / Chief Executive Officer Non-Executive Director Non-Executive Director Non-Executive Director Directors of the Group during the financial year were: Bob Vassie Kevin Lines Mark Zeptner Michael Bohm1 David Southam Natalia Streltsova The KMP during the financial year were: Tim Manners Duncan Coutts Peter Ruzicka Kevin Seymour Richard Jones Chief Financial Officer Chief Operating Officer General Manager – Exploration (appointed 20 April 2021) General Manager – Exploration (resigned 28 February 2021) Company Secretary and General Manager – Legal, HR Risk & Sustainability 1. Mr Bohm was appointed acting Non-Executive Chair from 1 October 2020 to 31 December 2020. Details on the Executive and Non-Executive Directors can be found on pages 70 to 71 of the Directors report. RAMELIUS RESOURCES ANNUAL REPORT 2021 73 DIRECTORS’ REPORT (CONTINUED) Remuneration report (continued) (b) Remuneration governance The Nomination & 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 ensure 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; and • 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; and • 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; and 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 (TFR); and Total variable remuneration (includes short term and long term incentives). 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 a short term incentive (STI) and / or a long term incentive (LTI). I L A C N A N I F T R O P E R 74 RAMELIUS RESOURCES ANNUAL REPORT 2021 DIRECTORS’ REPORT (CONTINUED) Remuneration report (continued) 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 2021 financial year the Managing Director / Chief Executive Officer was able to earn a maximum STI of 60% 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; and • No serious environmental, heritage, or community related breach. During the 2021 financial year the KPIs used to measure performance for the Managing Director / Chief Executive Officer were: • Net profit after tax relative to budget • Gold production relative to budget • All in sustaining cost (AISC) relative to budget • Discovery/Reserve addition to mine plan 30% 20% 20% 30% The KPIs used to measure performance for the other KMPs were 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 mine plan 20 - 30% 20 - 25% 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. As of July 2021, an additional Environmental, Social, and Corporate Governance (ESG) KPI, which incorporates safety, has been added to the KPIs listed above. The STI outcomes and cash payments for the 2020 financial year which were paid in the 2021 financial year are detailed in the following table Annual KPI1 Net profit after tax Gold production Reserve addition AISC Weighting Threshold Target Stretch Outcome 20-30% 20-25% 20-30% 20-40% 115% 102.5% - 97.5% 130% 105% 1 year 95% 150% 110% 2 years 90% Stretch Target Target Stretch 1. The KPI percentages for threshold, target and stretch categories in the table above are relative to the board approved budgets or Life of Mine Plan. What were the FY2020 STI measures and outcomes? When is it paid? The STI award is determined following a review of the financial results, operations, changes to the mine plan and the annual Resources & 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. RAMELIUS RESOURCES ANNUAL REPORT 2021 75 DIRECTORS’ REPORT (CONTINUED) Remuneration report (continued) Based on this assessment, the STI cash payments for the 2020 financial year which were paid in the 2021 financial year are detailed in the following table: Name Position Managing Director / Chief Executive Officer Chief Financial Officer Mark Zeptner Tim Manners Duncan Coutts Chief Operating Officer Kevin Seymour General Manger – Exploration Richard Jones Company Secretary and General Manager – Legal, HR Risk & Sustainability Target STI1 % $ 214,500 30% 132,495 30% 154,275 30% 98,193 30% Maximum STI1 $ % 268,125 38% 198,743 45% 231,413 45% 147,289 45% Achieved STI1 % $ 223,438 31% 172,700 39% 192,500 37% 117,700 36% 30% 99,825 45% 149,738 37% 124,300 1. Amounts disclosed above include superannuation attributable to the STI. Mr Zeptner was set a ‘once off’ STI for the 2020 financial year of up to 75% of TFR of which 50% was paid in cash (as disclosed in the table above) and up to 50% via performance rights. A total of 100% of the 322,342 performance rights granted to Mr Zeptner on 29 November 2019 vested in the 2021 financial year. These rights remain unexercised at the date of this report. 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. 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. How much can an executive earn? In the 2021 financial year, under the Performance Rights Plan, the number of rights granted to executives ranges up to 40% (100% 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 5 trading day period prior to the date of the grant. How is performance measured? For performance rights issued prior to 1 July 2020 there was one performance hurdle, relative total shareholder return (TSR). Performance rights granted from 1 July 2020 have two equally weighted performance hurdles, relative TSR and absolute TSR. Relative TSR Half of the performance rights issued under the LTI plan will vest depending on total shareholder returns (TSR) measured against a benchmark peer Group. The following companies have been identified by Ramelius to comprise the peer Group: Company ASX Code 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 Pantoro Limited Evolution Mining Limited Perseus Mining Limited De Grey Mining Limited Bellevue Gold Limited Red 5 Limited Capricorn Metals Limited Aurelia Metals Limited Alkane Resources Limited# OceanaGold Corporation# RRL SLR WGX NST RSG GOR DCN SBM PNR EVN PRU DEG BGL RED CMM AMI ALK OGC # Companies added to the peer Group after 30 June 2021 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% Absolute total shareholder returns The remaining half of performance rights granted will vest if the Ramelius TSR over the measurement period is greater than 15% compounded annual growth. Once vested, rights may be exercised within seven years of the vesting date. I L A C N A N I F T R O P E R 76 RAMELIUS RESOURCES ANNUAL REPORT 2021 DIRECTORS’ REPORT (CONTINUED) Remuneration report (continued) When is performance measured? What happens if an executive leaves? Performance rights have a three year vesting and measurement period. Any performance rights that do not vest will lapse after testing. There is no retesting of performance rights. 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. Based on the above assessment the performance rights issued, vested, and lapsed in the 2021 financial year (for the 2020 financial year performance) are detailed in the following table: Name Position Mark Zeptner Managing Director / Executive Officer Chief Financial Officer Tim Manners Duncan Coutts Chief Operating Officer Kevin Seymour General Manger – Exploration Richard Jones Company Secretary and General Manager – Legal, HR Risk & Sustainability Issued 1 355,392 86,275 102,451 59,510 64,706 322,342 317,778 342,222 254,222 - All performance rights 1,830,658 3,582,888 1. Performance rights issued during the financial year will be measured for vesting as at 30 June 2023. Performance rights measured for vesting Percentage vested % Number vested 322,342 317,778 342,222 254,222 - 3,582,888 100% 100% 100% 100% 0% 100% Other long term incentives The Board may at its discretion provide share rights/options as a long term retention incentive to employees. No such options were offered during the 2021 financial year. (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 cps $ cents cents 2021 126,778 2.5 1.70 15.64 15.45 2020 113,415 2.0 1.99 16.43 16.13 2019 21,832 1.0 0.73 3.74 3.67 2018 30,760 - 0.58 5.84 5.75 2017 17,765 - 0.45 3.39 3.36 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. 2021 Total remuneration mix1 Managing Director / CEO Other executives 0% 20% TFR 40% STI 60% LTI 80% 100% STI Forgone 1. 2021 total remuneration mix excludes KMPs Mr Seymour (resigned 28 February 2021) and Mr Ruzicka (appointed 19 April 2021). 45%30%22%3%55%21%20%4% RAMELIUS RESOURCES ANNUAL REPORT 2021 77 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 Mark Zeptner Managing Director / Chief Executive Officer Tim Manners Chief Financial Officer Duncan Coutts Chief Operating Officer Kevin Seymour General Manager – Exploration Peter Ruzicka General Manager – Exploration Richard Jones Company Secretary and General Manager – Legal, HR Risk & Sustainability Term of Agreement Base Salary incl. Super1 Company / Employee Notice Period Termination Benefit2 Ongoing commencing 1 July 2015 Ongoing commencing 31 July 2017 Ongoing commencing 12 February 2016 Resigned 28 February 2021 Ongoing commencing 19 April 2021 Ongoing commencing 26 October 2018 $725,000 6 / 3 months $440,000 6 / 3 months $522,500 6 / 3 months $303,505 3 / 3 months $302,500 3 / 3 months $330,000 6 / 3 months 6 months base salary 6 months base salary 6 months base salary 3 months base salary 3 months base salary 6 months base salary 1. Base salaries quoted are as at 30 June 2021, they are reviewed annually by the NRC. 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 twelve months base salary. All service agreements with Executives comply with the provisions of Part 2 D.2, Division 2 of the Corporations Act 2001. (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; and • Determined by the desire to attract a Group of individuals with pertinent knowledge and experience. In accordance with the Ramelius’ 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 in the following table. I L A C N A N I F T R O P E R 78 RAMELIUS RESOURCES ANNUAL REPORT 2021 DIRECTORS’ REPORT (CONTINUED) Remuneration report (continued) Non-executive Directors Bob Vassie1 Kevin Lines2 Michael Bohm David Southam Natalia Streltsova3 Total Year 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 Director fees Superannuation Total remuneration 96,250 - 48,125 176,136 122,500 110,000 122,500 110,000 122,500 78,750 511,875 474,886 9,625 - 4,813 17,614 12,250 11,000 12,250 11,000 12,250 7,875 51,188 47,489 105,875 - 52,938 193,750 134,750 121,000 134,750 121,000 134,750 86,625 563,063 522,375 1. Bob Vassie was appointed as Non-Executive Chair on 1 January 2021. 2. Kevin Lines retired as Non-Executive Chairman on 30 September 2020. 3. Natalia Streltsova was appointed as a Non-Executive Director on 1 October 2019. (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 Non Monetary Benefits1 Annual and Long Service Leave2 Super- annuation STI1, 4 Share Rights3 Total Perform. Related 6,402 6,518 6,402 6,518 25,000 20,833 21,694 17,581 22,449 37,367 39,275 (41,877) 172,700 165,000 223,438 254,100 418,306 383,919 497,500 446,665 Executive Director Mark Zeptner – Managing Director / Chief Executive Officer 700,000 2021 2020 632,500 Executives Tim Manners – Chief Financial Officer 2021 2020 Duncan Coutts – Chief Operating Officer 6,402 2021 2020 6,518 Peter Ruzicka – General Manager – Exploration5 1,309 2021 2020 - Kevin Seymour – General Manager – Exploration6 117,700 4,356 2021 2020 115,500 6,518 Richard Jones – Company Secretary and General Manager – Legal, HR Risk & Sustainability 124,300 6,402 2021 2020 93,500 6,518 Total 2021 2020 2,138,619 2,021,449 (20,905) (6,922) 162,461 276,698 305,000 281,667 116,812 100,933 830,638 793,100 192,500 165,000 88,296 45,418 19,262 33,853 23,343 22,997 31,273 32,590 25,000 20,830 14,583 20,856 25,000 20,833 55,352 - 5,535 - 4,872 - - - 351,539 462,003 1,345,654 1,334,077 42.7% 53.7% 167,181 161,251 192,815 186,550 - - (103,661) 128,122 118,460 76,122 808,732 771,636 933,479 859,416 67,068 - 174,534 540,772 602,505 501,637 726,334 1,014,048 3,931,972 4,007,538 42.0% 42.3% 41.3% 40.9% 0.0% - 8.0% 45.1% 40.3% 33.8% 39.6% 45.1% 1. 2. 3. Short term benefits as per Corporations Regulation 2M.3.03(1) Item 6. 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 or has been paid out for entitlements on termination. Share rights relate to rights over ordinary shares issued to key management personnel. The fair value of rights 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 were granted and not when shares were issued. 4. Refer to section (d) of this remuneration report for further information on the short term incentives paid. 5. Mr Ruzicka was appointed on 20 April 2021. 6. Mr Seymour resigned on 28 February 2021. In addition to the amounts above Mr Seymour was paid $112,000 in 2021 for annual and long service leave which had been accrued but not paid during his employment. RAMELIUS RESOURCES ANNUAL REPORT 2021 79 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 5 September 2018 29 November 2018 9 October 2019 29 November 2019 29 November 2019 1 October 2020 1 October 2020 26 November 2020 26 November 2020 Vesting and Exercise Date Expiry Date Exercise Price 1 July 2021 1 July 2021 1 July 2022 1 July 2022 1 July 2022 1 July 2023 1 July 2023 1 July 2023 1 July 2023 1 July 2028 1 July 2028 1 July 2029 1 July 2029 1 July 2029 1 July 2030 1 July 2030 1 July 2030 1 July 2030 $nil $nil $nil $nil $nil $nil $nil $nil $nil Value Per Performance Right at Grant Date $0.39 $0.27 $1.22 $0.86 $0.65 $1.31 $1.81 $0.94 $1.42 Vested 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. Performance rights The table below shows a reconciliation of performance rights held by each KMP from the beginning to the end of the 2021 financial year. All vested performance rights were exercisable. I L A C N A N I F T R O P E R 80 RAMELIUS RESOURCES ANNUAL REPORT 2021 DIRECTORS’ REPORT (CONTINUED) Remuneration report (continued) Balance at start of year Granted during the year Vested Exercised Forfeited / Cessation as KMP Balance at the end of the year Value to vest1 Number Number % Number Number % Vested Unvested $ - 967,025 568,956 500,000 - 212,382 260,966 317,778 247,294 284,483 342,222 - 157,398 201,186 254,222 - 160,014 189,655 355,392 - - - 86,275 - - - 102,451 - - - 59,510 - - - 64,706 - - - 322,342 - - - - - 317,778 - - - 342,222 - - - 254,222 - - - - 33% - - - - - 100% - - - 100% - - - 100% - - - - - - - - - - (317,778) - - - (342,222) - - - (254,222) - - - - - - - - - - - - - - - - - - - - - - - (59,510) (157,398) (201,186) - - - 100% 100% 100% - - - - - 322,342 - 500,000 - - - - - - - - - - - - - 355,392 644,683 568,956 - 86,275 212,382 260,966 - 102,451 247,294 284,483 - - - - - 324,805 196,899 - - 97,789 94,220 - - 116,124 109,709 - - - - - - 64,706 160,014 189,655 73,341 70,988 - Name Grant year Mark Zeptner 2021 2020 2019 2017 Tim Manners 2021 2020 2019 2018 Duncan Coutts 2021 2020 2019 2018 Kevin Seymour 2021 2020 2019 2018 Richard Jones 2021 2020 2019 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. Shareholdings The table below shows a reconciliation of shareholdings held by each KMP from the beginning to the end of the 2021 financial year. All shareholdings noted are held either directly or by the KMP or their associate. Name Mark Zeptner Bob Vassie Kevin Lines Michael Bohm David Southam Natalia Streltsova Kevin Seymour1 Duncan Coutts2 Tim Manners1 Balance at start of year Received during year on exercising of performance rights Sold during year Net change other3 Balance at end of year 4,512,500 - 1,000,000 637,500 - - 135,215 - - - - - - - - 254,222 342,222 317,778 (1,750,000) - - (237,500) - - - (245,000) (317,778) - 80,000 (1,000,000) 100,000 20,217 12,000 (389,437) - - 2,762,500 80,000 - 500,000 20,217 12,000 - 97,222 - All shareholdings noted above are held either directly by the KMP or their associate. 1. The share price on the date of exercise was $2.02. 2. The share price on the date of exercise was $2.36. 3. Net change other relates to on market purchases and sale of shares or holdings as at the date of resignation / retirement. RAMELIUS RESOURCES ANNUAL REPORT 2021 81 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 2020 Annual General Meeting Of the total valid available votes lodged, Ramelius received 99% of ‘FOR’ votes on its remuneration report for the 2020 financial year. The company did not receive any specific feedback at the meeting 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. I L A C N A N I F T R O P E R 82 RAMELIUS RESOURCES ANNUAL REPORT 2021 DIRECTORS’ REPORT (CONTINUED) Shares under option (a) Unissued ordinary shares No unissued ordinary shares of Ramelius Resources Limited are under option at the date of this report. 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. 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. Prior to the provision of any non audit services the Board of Directors considers the position and, in accordance with advice received from the Audit Committee, ensures that it 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. During the year no 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 (2020: $nil). 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 83. 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 financial statements. Amounts in the financial statements 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. Bob Vassie Chair Perth 26 August 2021 RAMELIUS RESOURCES ANNUAL REPORT 2021 83 DIRECTORS’ REPORT (CONTINUED) Auditor’s independence declaration 26 August 2021 The Directors Ramelius Resources Limited Level 1, 130 Royal Street East Perth WA 6004 Dear Board Members 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 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 26 August 2021 AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo RRaammeelliiuuss RReessoouurrcceess LLiimmiitteedd In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration The Directors of independence to the directors of Ramelius Resources Limited. Ramelius Resources Limited Level 1, 130 Royal Street As lead audit partner for the audit of the financial report of Ramelius Resources Limited for the year ended 30 East Perth WA 6004 June 2021, I declare that to the best of my knowledge and belief, there have been no contraventions of: • The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and Dear Board Members • Any applicable code of professional conduct in relation to the audit. AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo RRaammeelliiuuss RReessoouurrcceess LLiimmiitteedd Yours faithfully 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 2021, I declare that to the best of my knowledge and belief, there have been no contraventions of: DELOITTE TOUCHE TOHMATSU • The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and • Any applicable code of professional conduct in relation to the audit. David Newman Partner Yours faithfully Chartered Accountants 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 organisation I L A C N A N I F T R O P E R Liability limited by a scheme approved under Professional Standards Legislation Member of Deloitte Asia Pacific Limited and the Deloitte organisation 84 RAMELIUS RESOURCES ANNUAL REPORT 2021 FINANCIAL STATEMENTS 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 to the members 85 85 86 87 88 89 132 133 RAMELIUS RESOURCES ANNUAL REPORT 2021 85 INCOME STATEMENT For the year ended 30 June 2021 Revenue Cost of sales Gross profit Other expenses Other income Interest income Finance costs Profit before income tax Income tax expense Profit for the year Earnings per share Basic earnings per share Diluted earnings per share Note 1(a) 2(a) 2(b) 1(b) 2(c) 3 28(a) 28(b) 2021 $’000 634,283 (443,825) 190,458 (21,280) 8,261 715 (3,414) 174,740 (47,962) 126,778 Cents 15.64 15.45 STATEMENT OF COMPREHENSIVE INCOME For the year ended 30 June 2021 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 investments Other comprehensive income for the year Note 17 17 2021 $’000 126,778 156 377 533 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 2020 $’000 113,415 (18) 672 654 Total comprehensive income for the year 127,311 114,069 I L A C N A N I F T R O P E R 86 RAMELIUS RESOURCES ANNUAL REPORT 2021 BALANCE SHEET As at 30 June 2021 Current assets Cash and cash equivalents Trade and other receivables Inventories Other assets Total current assets Non current assets Other assets Investments Property, plant, and equipment Mine development Exploration and evaluation assets Total non current assets Total assets Current liabilities Trade and other payables Borrowings Lease liability Contingent consideration Current tax liabilities 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 Note 4(a) 5 6 6 7 8 9 10 11 12 13 14 15 13 14 3 15 16 17 2021 $’000 228,502 1,920 100,813 1,484 332,719 503 6,308 100,177 375,338 31,253 513,579 846,298 58,479 - 16,673 5,186 30,342 9,205 119,885 9,364 3,353 35,417 42,498 90,632 210,517 635,781 379,391 (33,277) 289,667 635,781 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 RAMELIUS RESOURCES ANNUAL REPORT 2021 87 STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2021 Balance at 30 June 2019 Adoption of AASB16 Leases (net of tax) At 1 July 2019 (re stated) Profit for the year Other comprehensive loss 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 based payment reserve $’000 2,032 - 2,032 - - - - - - 1,390 3,422 Share capital $’000 214,218 - 214,218 - - - 155,523 - 300 740 370,781 Other reserves $’000 Retained profits $’000 (9,706) - (9,706) - 46 46 (28,469) - - - (38,129) 72,398 (696) 71,702 113,415 608 114,023 - (6,579) - - 179,146 Total equity $’000 278,942 (696) 278,246 113,415 654 114,069 127,054 (6,579) 300 2,130 515,220 Balance at 1 July 2020 370,781 3,422 (38,129) 179,146 515,220 Profit for the year Other comprehensive gain Total comprehensive (loss) / income Transfer of loss on disposal of equity investments at FVOCI Transactions with owners in their capacity as owners: Payment of dividends Contributions of equity (Note 16) Share based payments Balance at 30 June 2021 - - - - - - - - - 533 533 87 126,778 - 126,778 126,778 533 127,311 (87) - - 7,650 960 379,391 - - 810 4,232 - - - (37,509) (16,170) - - 289,667 (16,170) 7,650 1,770 635,781 Share based payment reserve Share based payments reserve records items recognised as expenses on valuation of employees share options and rights. Other reserves - investments at FVOCI The Group has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income (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 disposed. 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. I L A C N A N I F S T N E M E T A T S 88 RAMELIUS RESOURCES ANNUAL REPORT 2021 STATEMENT OF CASH FLOWS For the year ended 30 June 2021 Cash flows from operating activities Receipts from operations Payments to suppliers and employees Interest received Income tax paid Net cash provided by operating activities Cash flows from investing activities Payments for property, plant, and equipment Payments for mine development Proceeds from sale of property, plant, and equipment Proceeds from the sale of subsidiary Proceeds from the sale of non core projects and royalties Payments for the acquisition of subsidiary, net of cash acquired Payments for investments Proceeds from the sale of investments Payments for mining tenements and exploration Payments for contingent consideration 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 secured deposits Dividends paid Net cash (used in) / provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Note 4(b) 14 15 16 12 13 6 2021 $’000 634,129 (304,622) 713 (24,571) 305,649 (40,335) (111,485) 55 1,000 2,000 (14,352) (308) 314 (13,725) (5,813) (699) (183,348) - - (24,375) (408) (21,886) 3,370 (16,170) (59,469) 62,832 165,670 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) 228,502 165,670 RAMELIUS RESOURCES ANNUAL REPORT 2021 89 CONTENTS OF THE NOTES TO THE FINANCIAL STATEMENTS 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 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: Inventories Note 6: Other assets Note 7: Investments Note 8: Property, plant, and equipment Note 9: Mine development 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 Note 18: Financial instruments and financial risk management Note 19: Capital risk management 90 92 92 94 95 96 99 100 101 101 102 104 106 107 108 108 111 112 114 115 115 115 119 120 120 120 121 121 122 123 123 123 123 126 126 127 127 130 131 I L A C N A N I F T R O P E R 90 RAMELIUS RESOURCES ANNUAL REPORT 2021 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 2021 was authorised for issue in accordance with a resolution of the Directors on 26 August 2021. 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 investments, which have been measured at fair value through profit and loss (FVPL) or fair value through other comprehensive income (FVOCI); has been presented in Australian dollars and rounded to the nearest $1,000 unless otherwise stated, in accordance with ASIC Legislative Instrument (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 2020. 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 Note 98 103, 105, & 107 103 & 105 105 105 105 107 110 111 113 113 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. RAMELIUS RESOURCES ANNUAL REPORT 2021 91 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 finalisation of the Penny Gold Mine Feasibility Study and consequently the Boards approval to commence project development which resulted in the transfer of the asset from exploration and evaluation expenditure to a mine development asset (Notes 9 & 10). For a detailed discussion about the Group’s performance and financial position please refer to our operating and financial review on pages 62 to 66. I L A C N A N I F T R O P E R 92 RAMELIUS RESOURCES ANNUAL REPORT 2021 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. The Group has identified three reportable segments of its business: • Mt Magnet: mining and processing of gold from the Mt Magnet region including the Vivien and Penny Gold Mines. Edna May: mining and processing of gold from the Edna May region including the Marda and Tampia Gold Mines. • Exploration: exploration and evaluation of gold mineralisation. • 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 2021 and 2020 are set out below: (b) Segment results 2021 Segment results Segment revenue Cost of production Amortisation and depreciation Movement in inventory Deferred mining costs Gross margin Exploration and evaluation costs and impairments Segment margin Interest income Other income Finance costs Other expenses Profit before income tax Total segment assets Total segment liabilities 2020 Segment results Segment revenue Cost of production Amortisation and depreciation Movement in inventory Deferred mining costs Gross margin Exploration and evaluation costs and impairments Segment margin Interest income Other income Finance costs Other expenses Profit before income tax Total segment assets Total segment liabilities Mt Magnet $’000 Edna May $’000 Exploration $’000 Total $’000 377,205 (200,388) (85,105) (4,218) 63,637 151,131 - 151,131 257,078 (173,735) (77,901) 4,882 29,003 39,327 - 39,327 - - - - - - (5,274) (5,274) 365,380 66,300 212,913 72,608 31,777 723 634,283 (374,123) (163,006) 664 92,640 190,458 (5,274) 185,184 715 8,261 (3,414) (16,006) 174,740 610,070 139,631 Mt Magnet $’000 Edna May $’000 Exploration $’000 Total $’000 324,322 (211,659) (70,465) 38,444 53,756 134,398 - 134,398 136,252 (117,877) (32,620) 17,728 33,335 36,818 - 36,818 - - - - - - (6,774) (6,774) 183,486 92,011 204,249 75,821 196,892 907 460,574 (329,536) (103,085) 56,172 87,091 171,216 (6,774) 164,442 998 1,346 (4,025) (13,276) 149,485 584,627 168,739 RAMELIUS RESOURCES ANNUAL REPORT 2021 93 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Segment information (continued) (c) Segment gross margin reconciliation Segment margin reconciles to profit before income tax for the year ended 30 June 2021 and 30 June 2020 as follows: Segment margin Other income Interest income Depreciation and amortisation Employee benefit expense Equity settled share based payments Fair value gains / (loss) on investments at FVPL Foreign exchange gain / (loss) Gain on sale of non core projects and royalties Finance costs Other expenses Profit before income tax (d) 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 Investments at FVOCI Property, plant, & equipment Total assets as per the balance sheet (e) 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 2021 $’000 185,184 3,261 715 (530) (8,827) (1,770) (364) (164) 5,000 (3,414) (4,351) 174,740 2021 $’000 610,070 228,502 828 13 6,308 577 846,298 2021 $’000 139,631 4,333 30,342 581 130 - 83 35,417 210,517 2020 $’000 164,442 31 998 (428) (6,737) (2,130) 173 - 1,142 (4,025) (3,981) 149,485 2020 $’000 584,627 165,670 3,630 13 624 378 754,942 2020 $’000 168,739 4,290 21,272 555 288 23,475 42 21,061 239,722 (f) Major customers Ramelius sells its gold production to either The Perth Mint or delivers it into forward gold contracts. (g) Segments assets by geographical location There are no non current assets situated outside the geographic region of Australia. I L A C N A N I F T R O P E R 94 RAMELIUS RESOURCES ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 1: Revenue The Group derives the following types of revenue: (a) Revenue Gold sales Silver sales Other revenue Total revenue (b) Other income Fair value gains on investments at FVPL Change in fair value of Edna May contingent consideration Gain on sale of non core projects and royalties Gain on sale of subsidiary Foreign exchange gains Total other income Note Note 7 2021 $’000 633,132 824 327 634,283 2021 $’000 2,279 - 5,000 982 - 8,261 2020 $’000 459,609 767 198 460,574 2020 $’000 - 173 1,142 - 31 1,346 (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. RAMELIUS RESOURCES ANNUAL REPORT 2021 95 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 2: Expenses Profit before tax includes the following expenses whose disclosure is relevant in explaining the performance of the Group: (a) Cost of sales Mining and milling production costs Employee benefits expense Royalties Amortisation and depreciation Inventory movements Total cost of sales (b) Other expenses Employee benefit expense Equity settled share based payments Other expenses Change in fair value of Edna May contingent consideration Amortisation and depreciation Exploration and evaluation costs Impairment of exploration and evaluation assets Foreign exchange losses Total other expenses (c) Finance costs Provisions: unwinding of discount Contingent consideration: unwinding of discount Interest on leases Interest and finance charges Total finance costs Note Note 26 14 10 Note 15 14 13 2021 $’000 214,198 41,236 26,049 163,006 (664) 443,825 2021 $’000 8,827 1,770 4,351 364 530 260 5,014 164 21,280 2021 $’000 368 804 933 1,309 3,414 2020 $’000 182,020 38,388 22,036 103,085 (56,171) 289,358 2020 $’000 6,737 2,130 3,981 - 428 438 6,336 - 20,050 2020 $’000 639 1,236 1,009 1,141 4,025 (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. I L A C N A N I F T R O P E R 96 RAMELIUS RESOURCES ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 3: Income tax expense This note provides an analysis of the Group’s income tax expense, shows what amounts are recognised directly in equity and how the tax expense is affected by non assessable and non deductible items. It also explains significant estimates made in relation to the Groups tax position. (a) The components of tax expense comprise Current tax Deferred tax Income tax expense (b) Reconciliation 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 Tax losses utilised in current year previously not brought to account Tax losses brought to account Income tax expense Applicable effective tax rate (c) Deferred tax movement 2021 $’000 33,640 14,322 47,962 2021 $’000 174,740 52,422 531 (1,105) (3,886) - 47,962 27% 2020 $’000 22,480 13,590 36,070 2020 $’000 149,485 44,846 639 671 (2,996) (7,090) 36,070 24% 30 June 2021 Deferred tax liability (DTL) Exploration and evaluation Development Inventory – consumables Investments at FVPL Total DTL Deferred tax asset (DTA) Inventory – deferred mining costs Inventory – stock Property, plant, and equipment Provisions Leases (see Note 13) Investments at FVOCI Tax losses Other Total DTA Net deferred tax liability # 1 July 2020 $’000 Transfers $’000 Other comp. income $’000 Income statement $’000 30 June 2021 $’000 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) (16,241) 16,241 - - - - - - - - - - - - - - - - - - - - - - (34) - - (34) 3,351 4,465 922 683 9,421 - (1,204) (1,478) 1,340 (156) - (3,598) 195 (4,901) (14,322) 9,376 46,864 1,236 683 58,159 1,044 265 338 15,923 81 (62) 3,492 1,661 22,742 (35,417) # Deferred tax assets and liabilities have been offset for presentation on the balance sheet pursuant to set off provisions RAMELIUS RESOURCES ANNUAL REPORT 2021 97 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 3: Income tax expense (continued) (c) Deferred tax movement (continued) 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) Investments 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 - - - - 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. (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 2021 2020 Gross Net (30%) Gross Net (30%) 11,639 13,987 25,626 3,492 4,196 7,688 23,632 25,402 49,034 7,090 7,620 14,710 Tax losses arising from the acquisition of the Spectrum Metals Limited during the 2020 financial year of $12,953,000 (with a tax benefit of $3,886,000) were recognised and fully utilised within the current financial year. Tax losses arising from the acquisition of Explaurum Operations Pty Limited during the 2019 year of $11,993,000 (with a tax benefit of $3,598,000 brought to account in the 2020 financial year) were utilised during the current financial year. The balance of unused Explaurum Operations Pty Limited tax losses is $11,639,000 (with a tax benefit of $3,492,000) at 30 June 2021. A deferred tax asset has been recognised for these unused tax losses. The utilisation of losses depends upon the generation of future taxable profits which Ramelius believes to be recoverable based on current taxable income projections. Utilisation will also be subject to relevant tax legislation associated with recoupment. The unused tax losses for which no deferred tax asset has been recognised relates to capital losses. I L A C N A N I F T R O P E R 98 RAMELIUS RESOURCES ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 3: Income tax expense (continued) 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. 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. RAMELIUS RESOURCES ANNUAL REPORT 2021 99 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) 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 Equity settled share based payments Amortisation and depreciation Write off and impairment of exploration assets Discount unwind on provisions Discount unwind on contingent consideration Change in fair value of contingent consideration Net exchange differences Fair value gains on investments at FVPL Items presented as investing or financing activities Gain on sale of non core projects and royalties Gain on sale of subsidiaries Other (Increase) / decrease in assets Prepayments Trade and other receivables Inventories Increase / (decrease) in liabilities Trade and other payables Current tax payable Provisions Deferred tax liabilities Net cash provided by operating activities 2021 $’000 108,502 120,000 228,502 2021 $’000 126,778 1,770 163,536 5,274 368 804 364 164 (2,279) (5,000) (982) 2,316 (379) 1,314 (3,260) (9,759) 9,070 1,160 14,390 305,649 2020 $’000 125,670 40,000 165,670 2020 $’000 113,415 2,130 103,513 6,336 639 1,236 (173) (31) - - - 1,121 918 3,725 (56,486) 24,347 21,272 721 13,348 236,031 (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 above. 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. I L A C N A N I F T R O P E R 100 RAMELIUS RESOURCES ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 4: Cash and cash equivalents (continued) (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 2021 $’000 228,502 - (16,673) (9,364) 202,465 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 Cash flows Lease additions (including interest) Balance at 30 June 2021 Note 5: Inventories Ore stockpiles Gold in circuit Gold bullion & doré Gold nuggets Consumables and supplies Total inventories Borrowings $’000 Leases $’000 Sub total $’000 - - - (24,375) - (24,375) 24,375 - - - (21,256) (21,256) 15,737 (24,970) (30,489) 21,886 (17,434) (26,037) - (21,256) (21,256) (8,638) (24,970) (54,864) 46,261 (17,434) (26,037) Cash $’000 95,815 - 95,815 69,855 - 165,670 62,832 - 228,502 2021 $’000 76,792 5,889 4,048 80 14,004 100,813 2020 $’000 165,670 (24,375) (16,643) (13,846) 110,806 Net Cash $’000 95,815 (21,256) 74,559 61,217 (24,970) 110,806 109,093 (17,434) 202,465 2020 $’000 73,308 5,382 7,376 80 11,407 97,553 (a) Inventory expense The reversal of prior period net realisable value write downs through cost of sales amounted to $3,920,000 (2020: $4,802,000 write down). A large component of the net realisable value provision recognised at 30 June 2020 was reversed over the 2021 financial year as stockpile grades increased or the lower grade (predominantly Stellar) ore was milled. (b) Recognition and measurement Inventories Ore stockpiles, gold in circuit and poured gold bars (bullion and doré) 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. RAMELIUS RESOURCES ANNUAL REPORT 2021 101 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 5: Inventories (continued) 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. Ore stockpiles 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 twelve months after reporting date, it is classified as a non current asset. 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. Note 6: Other assets Current Prepayments Secured term deposits with financial institutions Total other current assets Non current Other security bonds & deposits Total other non current assets 2021 $’000 1,484 - 1,484 503 503 2020 $’000 1,105 3,370 4,475 503 503 (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 7: Investments Listed investment financial assets are measured at fair value and depending on their nature classified as either fair value through profit and loss or fair value through other comprehensive income. Investments at fair value through profit and loss Investments at fair value through other comprehensive income Total investments Gains recognised through profit and loss Gains recognised in other comprehensive income 2021 $’000 3,279 3,029 6,308 2,279 377 2020 $’000 - 624 624 - 672 (a) Investments at fair value through profit and loss An investment is classified at fair value through profit and loss if it is classified as held for trading or is designated as such on initial recognition. Investments are designated at fair value through the profit and loss if Ramelius manages such investments and makes purchase and sale decisions based on their fair value in accordance with the risk management or investment strategy. Attributable transaction costs are recognised in the profit and loss as incurred. (b) Investments at fair value through other comprehensive income An investment at fair value through other comprehensive income comprise equity securities which are not held for trading, and which the Group has irrevocably elected at initial recognition to recognise in this category. These are strategic investments and Ramelius considered this classification to be more relevant. I L A C N A N I F T R O P E R 102 RAMELIUS RESOURCES ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 8: Property, plant, and equipment 2021 As at 1 July 2020 Cost Accumulated depreciation Net book amount Year ended 30 June 2021 Opening net book amount Transfers to mine development Additions Disposals Transfers Depreciation charge Closing net book amount As at 30 June 2021 Cost Accumulated depreciation Net book amount 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 Land and buildings $’000 Plant and equipment $’000 Assets under construction $’000 Right of use assets $’000 9,411 (2,185) 7,226 7,226 - 8,522 - 10 (751) 15,007 17,943 (2,936) 15,007 118,781 (84,678) 34,103 34,103 - 12,650 (127) 6,239 (13,535) 39,330 137,292 (97,962) 39,330 7,340 - 7,340 7,340 (181) 19,163 - (6,249) - 20,073 20,073 - 20,073 44,223 (14,524) 29,699 29,699 - 16,501 - - (20,433) 25,767 60,724 (34,957) 25,767 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 $’000 179,755 (101,387) 78,368 78,368 (181) 56,836 (127) - (34,719) 100,177 236,032 (135,855) 100,177 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 (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: RAMELIUS RESOURCES ANNUAL REPORT 2021 103 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 8: Property, plant, and equipment (continued) (a) Depreciation (continued) Class of fixed asset Land and buildings Motor vehicles Computers and communication equipment Furniture and equipment Plant and equipment Useful life 1 - 40 years 2 - 12 years 2 - 10 years 1 - 20 years 1 – 30 years Key judgement, estimates and assumptions: Depreciation The estimations of useful lives, residual value and depreciation methods require management judgement and are reviewed biannually 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). (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 judgement, 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: • • • • Acquisitions complementing the existing CGUs of the Group. Strong operational and financial performance of the CGUs; The extension of mine life across all CGUs; Positive gold price environment against budget; and (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. I L A C N A N I F T R O P E R 104 RAMELIUS RESOURCES ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 9: Mine development Mine development Less: accumulated amortisation Net book amount Mine development Opening net book amount Additions Restoration and rehabilitation adjustment Transfer from property, plant, and equipment Transfer from exploration and evaluation asset Amortisation Closing net book amount Note 15 8 10 2021 $’000 812,021 (436,683) 375,338 208,268 119,163 2,935 181 173,608 (128,817) 375,338 2020 $’000 516,134 (307,866) 208,268 99,430 107,537 (4,753) - 83,537 (77,483) 208,268 (a) Impairment No impairment of development assets arose during the 2021 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. RAMELIUS RESOURCES ANNUAL REPORT 2021 105 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 9: Mine development (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. I L A C N A N I F T R O P E R 106 RAMELIUS RESOURCES ANNUAL REPORT 2021 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 26(b) 9 2021 $’000 31,253 196,247 - 13,652 (18) (5,014) (6) (173,608) 31,253 2020 $’000 196,247 99,442 168,515 18,355 (208) (6,336) 16 (83,537) 196,247 (a) Transfer to development assets During the year a total of $173,608,000 was transferred from exploration and evaluation assets to a mine development asset. This included $171,506,000 relating to the Penny Gold Mine. The Penny Gold Mine’s costs were transferred to mine development upon the completion of the Feasibility Study and subsequent investment decision with the project now moving into development. During 2020, a total of $83,537,000 was transferred from exploration and evaluation assets to a mine development asset. These amounts related to the Tampia Gold Mine and the Eridanus open pit project (Mt Magnet). Details of the transfer were disclosed in Note 10 of the Group’s annual financial statements for the year ended 30 June 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. 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. RAMELIUS RESOURCES ANNUAL REPORT 2021 107 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 10: Exploration and evaluation assets (continued) Key judgement, estimates and assumptions: 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 $5,014,000 (2020: $6,336,000) 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. The recoverable amount of capitalised expenditure relating to undeveloped mining projects can be particularly sensitive to variations in key estimates and assumptions. If variation in key estimates or assumptions has a negative impact on recoverable amount it could result in a requirement for impairment. Note 11: Trade and other payables Trade payables Other payables and accruals Total trade and other payables 2021 $’000 19,941 38,538 58,479 2020 $’000 23,350 58,952 82,302 (a) Recognition and measurement 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. I L A C N A N I F T R O P E R 108 RAMELIUS RESOURCES ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 12: Borrowings Current Secured bank loans Less: capitalised borrowing costs Total current borrowings 2021 $’000 - - - 2020 $’000 24,375 (900) 23,475 (a) Secured liabilities and assets pledged as security Secured Bank Loans The secured bank loan under the Syndicated Financial Agreement (SFA) entered into last year has been fully repaid at 30 June 2021. Whilst the secured bank loan has been fully repaid the facility itself, and security structure, remains in place to facilitate forward gold sales for hedging purposes. The Group has granted a security interest over all of its assets in favour of CBA Corporate Services (NSW) Pty Ltd as security trustee. 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 2021 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. 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: Opening lease liability Additions Interest expense (Note 2(c)) Payments Closing lease liability Maturity analysis: Year 1 Year 2 Year 3 Year 4 Gross lease liability Less future interest charges Total lease liability 2021 $’000 16,673 9,364 26,037 2021 $’000 30,489 16,501 933 (21,886) 26,037 17,240 7,246 2,356 - 26,842 (805) 26,037 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 RAMELIUS RESOURCES ANNUAL REPORT 2021 109 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 13: Lease liabilities (continued) 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 twelve 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): 2021 As at 1 July 2020 Additions Depreciation charge As at 30 June 2021 As at 1 July 2019 Additions Depreciation charge As at 30 June 2020 Land and buildings $’000 Plant and equipment $’000 Vehicles $’000 Total $’000 277 115 (209) 183 428 - (151) 277 29,133 13,397 (19,204) 23,326 19,654 23,708 (14,229) 29,133 289 2,989 (1,020) 2,258 180 253 (144) 289 29,699 16,501 (20,433) 25,767 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: The application of AASB 16 has resulted in the following amounts being recorded in the income statement: Depreciation of right of use asset Interest expense Income tax expense Total amount recorded in the income statement resulting from AASB 16 Note 8 2(c) 3 2021 $’000 20,433 933 (156) 21,210 2020 $’000 14,524 1,009 61 15,594 Payments of $2,874,000 (2020: $6,180,000) for short term leases (lease terns of 12 months or less) were expensed in the income statement for the year ended 30 June 2021. (a) Accounting policy - leases 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. I L A C N A N I F T R O P E R 110 RAMELIUS RESOURCES ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 13: Lease liabilities (continued) Right of use assets (continued) 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 • Motor vehicles Buildings • 2 to 5 years 2 to 3 years 2 to 3 years Periodic adjustments are made for any remeasurement 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 twelve 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. 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 2.53% and 3.75%. RAMELIUS RESOURCES ANNUAL REPORT 2021 111 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 Opening book amount Payments Unwinding of discount rate Change in fair value of contingent consideration Total contingent consideration Note 2(c) 2(b) 2021 $’000 5,186 3,353 8,539 13,184 (5,813) 804 364 8,539 2020 $’000 6,261 6,923 13,184 12,121 - 1,236 (173) 13,184 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 $44,187,000. The fair value of the contingent consideration has been revalued at 30 June 2021 which resulted in an increase of the contingent consideration of $364,000 which has been recorded in the income statement. I L A C N A N I F T R O P E R 112 RAMELIUS RESOURCES ANNUAL REPORT 2021 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 Note 9 2(c) 2021 $’000 7,875 1,330 9,205 507 41,991 42,498 40,717 2,935 (699) 368 43,321 2020 $’000 6,804 2,415 9,219 418 38,302 38,720 46,371 (4,753) (1,540) 639 40,717 (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 twelve 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. 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 twelve 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 twelve 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. RAMELIUS RESOURCES ANNUAL REPORT 2021 113 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 15: Provisions (continued) 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 biannually 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: Provision for 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 I L A C N A N I F T R O P E R 114 RAMELIUS RESOURCES ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 16: Share capital Ordinary shares Share capital 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 Shares issued from exercise of performance rights Shares issues as consideration for asset acquisition2 At 30 June 2021 Number of shares 657,872,969 145,203,969 1,377,522 1,500,000 - 805,954,460 3,062,806 5,000,000 814,017,266 $’000 214,218 155,523 598 300 142 370,781 960 7,650 379,391 1. Represents the value of shares at the date of issue. Details of the acquisition were disclosed in Note 20 of the Group’s financial statements for the year ended 30 June 2020. 2. Represents the shares issued for the acquisition of the minority interest of the Tampia Gold Mine. (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. RAMELIUS RESOURCES ANNUAL REPORT 2021 115 NOTES TO THE FINANCIAL STATEMENTS KEY NUMBERS (CONTINUED) Note 17: Reserves Share based payments reserve Investments at FVOCI Other NCI acquisition reserve Foreign currency translation reserve Total reserves 2021 $’000 4,232 147 634 (38,395) 105 (33,277) 2020 $’000 3,422 (317) 634 (38,395) (51) (34,707) Share based payment reserve Share based payments reserve records items recognised as expenses on valuation of employees share options and rights. Investments at FVOCI The Group has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income (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 disposed. 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 Investments Total financial assets Financial liabilities Trade and other payables Lease Liabilities Contingent consideration Borrowings Total financial liabilities 2021 $’000 108,502 120,000 1,920 - 503 6,308 237,233 58,479 26,037 8,539 - 93,055 2020 $’000 125,670 40,000 3,234 3,370 503 624 173,401 82,302 30,489 13,184 23,475 149,450 I L A C N A N I F T R O P E R 116 RAMELIUS RESOURCES ANNUAL REPORT 2021 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 investments include any investment 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 $108,502,000 (2020: $125,670,000) that is available for managing liquidity risk. In addition to this short term deposits at call totalled $120,000,000 (2020: $40,000,000). 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. 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 twelve months equal their carrying balances as the impact of discounting is not significant. RAMELIUS RESOURCES ANNUAL REPORT 2021 117 NOTES TO THE FINANCIAL STATEMENTS RISK (CONTINUED) Note 18: Financial instruments and financial risk management (continued) Maturities of financial liabilities As at 30 June 2021 Trade and other payables Lease liabilities Contingent consideration Total non derivatives As at 30 June 2020 Trade and other payables Borrowings Lease liabilities Contingent consideration Total non derivatives Less than 6 months $’000 6 – 12 months $’000 Between |1 and 2 years $’000 Between 2 and 5 years $’000 Total contractual cash flows $’000 Carrying amount of liabilities $’000 58,479 9,077 3,861 71,417 72,412 16,250 9,238 1,964 99,864 - 7,596 1,738 9,334 9,890 8,125 7,404 4,298 29,717 - 7,051 3,180 10,231 - - 7,711 6,025 13,736 - 2,313 405 2,718 - - 6,136 2,118 8,254 58,479 26,037 9,184 93,700 82,302 24,375 30,489 14,405 151,571 58,479 26,037 8,539 93,055 82,302 23,475 30,489 13,184 149,450 (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. Past due but not impaired i. As at 30 June 2021 there were no receivables past due but not impaired (2020: NIL). Impaired trade receivables ii. 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: • • • 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. significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (past due). Foreign currency risk (c) Market risk i. 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. 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: I L A C N A N I F T R O P E R 118 RAMELIUS RESOURCES ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS RISK (CONTINUED) Note 18: Financial instruments and financial risk management (continued) 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 2021, the Group had 206,000 ounces in forward sales contracts at an average price of A$2,335. 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 149,600oz (277,450oz less forward sales of 127,850oz) in 2021 and 67,410oz (228,210oz less forward sales of 160,800oz) in 2020, 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 2021 $’000 14,960 (14,960) 14,960 (14,960) 2020 $’000 6,741 (6,741) 6,741 (6,741) (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). (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. RAMELIUS RESOURCES ANNUAL REPORT 2021 119 NOTES TO THE FINANCIAL STATEMENTS RISK (CONTINUED) 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 2020 financial year of 2 cents (2019: 1 cent) per fully paid share paid on 2 October 2020 Total dividends paid Franked dividends Franking credits available for subsequent reporting periods based on a tax rate of 30% 2021 $’000 16,170 16,170 2021 $’000 68,203 2020 $’000 6,579 6,579 2020 $’000 41,486 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. I L A C N A N I F T R O P E R 120 RAMELIUS RESOURCES ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS GROUP STRUCTURE Note 20: Asset acquisitions (a) Penny Gold Mine (Spectrum Metals Limited) On 23 June 2020, the company completed the acquisition of Spectrum Metals Limited. The total purchase consideration was $170,806,000 comprising cash paid of $31,433,000, shares issued (net of NCI reserve and revaluation of on market acquisitions) of $127,662,000, and acquisitions related costs of $11,711,000. 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 20 of the Group’s annual financial statements for the year ended 30 June 2020. (b) Amounts paid in current year During the year Ramelius paid acquisition costs (being transaction stamp duty) that it previously provided for, but not paid. The stamp duty related to the Tampia, Marda, and Penny Gold Mine acquisitions. The final stamp duty on these acquisitions paid in the current year was $14,352,000. Note 21: Interests in other entities (a) Controlled entities The Group’s principal subsidiaries at 30 June 2021 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 Country of incorporation Functional currency Percentage owned 2021 % Percentage owned 2020 % Australia Australian dollars n/a Australia Australia USA Australia Australia Australian dollars Australian dollars US dollars Australian dollars Australian dollars 100 100 100 100 100 Australia Australian dollars 100 Subsidiaries of Spectrum Metals Limited Penny Operations Pty Limited (Formerly Zebra Minerals Pty Limited) Red Dirt Mining Pty Limited Subsidiaries of Ramelius Operations Pty Limited Edna May Operations Pty Limited Marda Operations Pty Limited Australia Australia Australian dollars Australian dollars Australia Australia Australian dollars Australian dollars Subsidiaries of Explaurum Limited Tampia Operations Pty Limited (Formerly Explaurum Operations Pty Limited) Ninghan Exploration Pty Limited Australia Australia Australian dollars Australian dollars 100 - 100 100 100 100 The parent entity and all subsidiaries of Ramelius, except for Ramelius USA Corporation (including all of its subsidiaries), form part of the closed Group. n/a 100 100 100 100 100 100 100 100 100 100 100 100 RAMELIUS RESOURCES ANNUAL REPORT 2021 121 NOTES TO THE FINANCIAL STATEMENTS GROUP STRUCTURE (CONTINUED) Note 21: Interests in other entities (continued) (b) Joint operations The Group has the following direct interests in unincorporated joint operations at 30 June 2021 and 30 June 2020: Joint operation project Joint operation partner Nulla South Gibb Rock Coogee Farm out Parker Dome Mt Finnerty Jupiter Chalice Gold Mines Limited Chalice Gold Mines Limited Unlisted entity Unlisted entity Unlisted entity Kinetic Gold# * 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: Non current assets Exploration and evaluation assets (Note 10) (c) Recognition and measurement Principal activity Gold Gold Gold Gold Gold Gold Interest % 2021 75%* 0%* 0%* 0%* 0%* 0%* 2020 0%* 0%* Diluting 90% 0%* 0%* 0%* 2021 $’000 248 2020 $’000 684 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 $172,103 (2020: $120,145). These bank guarantees are fully secured by cash on term deposit. I L A C N A N I F T R O P E R 122 RAMELIUS RESOURCES ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS UNRECOGNISED ITEMS (CONTINUED) Note 23: Commitments (a) Gold delivery commitments Forward sale contracts are accounted for as sale contracts with revenue recognised once gold has been physically delivered. The physical gold delivery contracts are considered own use contracts and therefore do not fall within the scope of AASB 9 Financial Instruments: Recognition and Measurement. As a result, no derivatives are required to be recognised. Forward gold sale contract delivery commitments are shown below: Gold delivery commitments As at 30 June 2021 Within one year Between one and five years Total As at 30 June 2020 Within one year Between one and five years Total Gold for physical delivery Oz Contracted sales price A$/oz Committed gold sales value $’000 142,500 63,500 206,000 125,850 121,500 247,350 $2,308 $2,393 $2,335 $2,046 $2,227 $2,135 328,927 151,994 480,921 257,456 270,525 527,981 (b) Capital expenditure commitments Capital expenditure contracted but not provided for in the financial statements: Within one year 2021 $’000 4,461 2020 $’000 3,575 (c) 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 2021 $’000 4,958 14,488 17,140 36,586 2020 $’000 5,077 17,572 21,580 44,229 RAMELIUS RESOURCES ANNUAL REPORT 2021 123 NOTES TO THE FINANCIAL STATEMENTS OTHER INFORMATION Note 24: Events occurring after the reporting period In August 2021 a binding agreement was executed with Liontown Resources Ltd (‘’Liontown’’) for the termination of the Lithium Royalty owned by Ramelius over the majority of Liontown’s Kathleen Valley Lithium Project. Consideration of $30.3 million was paid upon completion on 4 August 2021. The royalty was granted when Ramelius disposed of the Kathleen Valley Lithium – Tantalum project to Liontown in 2016. The royalty comprised both a production component of A$0.50/tonne of ore mined and a sales component of 1% of the gross sales of the ore. There were no other matters or circumstances that have arisen since 30 June 2021 that have 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 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. 2021 $ 3,512,405 168,000 88,296 726,334 4,495,035 2020 $ 3,321,883 148,422 45,560 1,014,048 4,529,913 (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) Performance rights Under the Performance Rights Plan, which was approved by shareholders at the 2019 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. From 1 July 2020, there are two equally weighted performance hurdles, relative total shareholder returns (TSR) measured against a benchmark peer Group and 15% absolute TSR. Prior to 1 July 2020, the only performance hurdle was relative TSR. Once vested, performance rights remain exercisable for a period of seven years. Performance rights issued under the plan carry no voting or dividend rights. I L A C N A N I F T R O P E R 124 RAMELIUS RESOURCES ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OTHER INFORMATION (CONTINUED) Note 26: Share based payments (continued) The table set out below summarises the performance rights granted: As at 1 July Performance rights forfeited Performance rights granted Performance rights exercised As at 30 June Vested and exercisable at 30 June 2021 Performance rights 2020 Performance rights 11,762,913 (1,120,354) 1,830,658 (3,062,806) 9,410,411 1,744,707 10,075,033 (618,601) 3,684,003 (1,377,522) 11,762,913 1,224,625 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 Performance rights granted: 1 Oct 2020 1 Oct 2020 26 Nov 2020 26 Nov 2020 $nil 1 Oct 2020 2.8 years $2.07 65% 0.90% $nil 1 Oct 2020 2.8 years $2.07 65% 0.90% $nil 26 Nov 2020 2.6 years $1.70 65% 1.16% $nil 29 Nov 2020 2.6 years $1.70 65% 1.16% 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 1 October 2020 26 November 2020 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 1 July 2030 1 July 2030 2021 Performance rights 2020 Performance rights 101,138 129,593 241,043 500,000 772,933 - - 1,976,026 1,081,024 2,146,509 322,342 644,683 1,139,728 355,392 9,410,411 202,276 213,881 308,468 500,000 2,342,388 464,445 580,500 2,437,039 1,156,469 2,590,422 322,342 644,683 - - 11,762,913 Weighted average remaining contractual life of performance rights outstanding at the end of the year 7.23 years 7.92 years RAMELIUS RESOURCES ANNUAL REPORT 2021 125 NOTES TO THE FINANCIAL STATEMENTS OTHER INFORMATION (CONTINUED) Note 26: Share based payments (continued) (b) 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 2021 $’000 1,770 1,770 2020 $’000 2,130 2,130 (c) 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) 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. (ii) 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. I L A C N A N I F T R O P E R 126 RAMELIUS RESOURCES ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OTHER INFORMATION (CONTINUED) 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: Total remuneration of Deloitte Touche Tohmatsu for audit or review of financial reports of the Group 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 (d) Calculation of earnings per share Basic earnings per share is calculated by dividing: 2021 $’000 2020 $’000 188,700 156,175 2021 Cents 2020 Cents 15.64 15.45 16.43 16.13 2021 Number 2020 Number 810,528,504 690,240,811 9,952,989 820,481,493 12,922,406 703,163,217 - - 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. RAMELIUS RESOURCES ANNUAL REPORT 2021 127 NOTES TO THE FINANCIAL STATEMENTS OTHER INFORMATION (CONTINUED) Note 29: Assets pledged as security The carrying amounts of assets pledged as security for current borrowings are: Current Floating Cash and cash equivalents Receivables Inventories Other Assets Total current assets pledged as security Non current Floating charge Investments Property, plant and equipment Development assets Exploration and development assets Total non current assets pledged as security Total assets pledged as security 2021 $’000 228,502 1,920 100,813 1,484 332,719 6,308 100,177 373,237 35,837 515,559 848,278 2020 $’000 164,951 3,221 97,553 4,475 270,200 624 78,058 208,268 26,038 312,988 583,188 Note 30: Deed of cross guarantee Pursuant to ASIC Instrument 2016/785, wholly owned controlled entities Mt Magnet Gold Pty Ltd, RMSXG Pty Ltd, Ramelius Operations Pty Ltd, Edna May Operations Pty Ltd, Marda Operations Pty Ltd, Tampia Operations Pty Ltd, Ninghan Exploration Pty Ltd and Penny Operations Pty Ltd are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of its financial reports and Director’s 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 Pty Ltd 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 Ltd, Tampia 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. In March 2021, Spectrum Metals Ltd and Penny Operations Pty Ltd joined the closed Group by entering the Deed of Cross Guarantee by way of 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 Ltd, Tampia Operations Pty Ltd, Ninghan Exploration Pty Ltd and Penny Operations Pty Ltd have also given a similar guarantee in the event that Ramelius Resources Limited is wound up. 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. I L A C N A N I F T R O P E R 128 RAMELIUS RESOURCES ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS OTHER INFORMATION (CONTINUED) Note 30: Deed of cross guarantee (continued) Statement of comprehensive income Sales revenue Cost of sales Gross profit Other expenses Other income Interest income Finance costs Profit before income tax Income tax expense Profit for the year Other comprehensive income Net change in fair value of investments Other comprehensive income for the year 2021 $’000 634,283 (443,825) 190,458 (21,158) 8,261 715 (3,414) 174,862 (47,962) 126,900 376 376 2020 $’000 460,486 (289,358) 171,128 (18,021) 1,346 996 (4,025) 151,424 (36,070) 115,354 655 655 Total comprehensive income for the year 127,276 116,009 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 Investments Property, plant, and equipment Mine development Exploration and evaluation assets Total non current assets Total assets 2021 $’000 228,502 1,920 100,813 1,484 332,719 1,754 503 6,308 100,177 375,338 31,253 515,333 848,052 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 RAMELIUS RESOURCES ANNUAL REPORT 2021 129 NOTES TO THE FINANCIAL STATEMENTS OTHER INFORMATION (CONTINUED) Note 30: Deed of cross guarantee (continued) Balance sheet (continued) 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 2021 $’000 58,479 - 16,673 5,186 30,342 9,205 119,885 9,364 3,353 35,417 42,498 90,632 210,517 637,535 379,391 (33,384) 291,528 637,535 2020 $’000 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 I L A C N A N I F T R O P E R 130 RAMELIUS RESOURCES ANNUAL REPORT 2021 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 after income tax Total comprehensive income 2021 $’000 134,319 515,384 (31,034) (25,892) 489,492 379,391 4,232 12 105,857 489,492 24,913 24,652 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 (i) 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 2021 $’000 393 1,020 1,113 2,526 2020 $’000 511 1,392 1,404 3,307 (c) 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. (d) 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 $172,103 (2020: $120,145). These bank guarantees are fully secured by cash on term deposit. RAMELIUS RESOURCES ANNUAL REPORT 2021 131 NOTES TO THE FINANCIAL STATEMENTS OTHER INFORMATION (CONTINUED) Note 31: Parent entity information (continued) (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 Pty Ltd 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 Ltd, Tampia 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. In March 2021, Spectrum Metals Ltd and Penny Operations Pty Ltd joined the closed Group by entering the Deed of Cross Guarantee by way of 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 2020. Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2021 reporting periods and have not been early adopted by the Group. The Group has assessed that these new standards and interpretations will not have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions. I L A C N A N I F T R O P E R 132 RAMELIUS RESOURCES ANNUAL REPORT 2021 DIRECTORS’ DECLARATION In the Directors’ opinion: (a) the financial statements and notes set out on pages 84 to 131 are in accordance with the Corporations Act 2001, including: (i) (ii) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 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. Bob Vassie Chair Perth 26 August 2021 RAMELIUS RESOURCES ANNUAL REPORT 2021 133 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 RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt 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 2021, 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: • Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial performance for the year then ended; and • 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 organisation. I L A C N A N I F T R O P E R 134 RAMELIUS RESOURCES ANNUAL REPORT 2021 INDEPENDENT AUDITOR’S REPORT To the members of Ramelius Resources Limited KKeeyy AAuuddiitt MMaatttteerr HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt MMaatttteerr AAccccoouunnttiinngg ffoorr mmiinnee ddeevveellooppmmeenntt aasssseettss As at 30 June 2021, the carrying value of mine development assets amounts to $375.3 million as disclosed in Note 9. During the year the Group incurred $119.2 million of capital expenditure related to mine development assets and recognised related amortisation expenses of $128.8 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 the capitalisation of both underground and open pit mining costs and the production of physical mining data; and in place relation to in 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 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 including: the inputs to source documentation, ▪ ▪ ▪ 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. RAMELIUS RESOURCES ANNUAL REPORT 2021 135 INDEPENDENT AUDITOR’S REPORT To the members of Ramelius Resources Limited 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 2021, 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. 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 fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • 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. I L A C N A N I F T R O P E R 136 RAMELIUS RESOURCES ANNUAL REPORT 2021 INDEPENDENT AUDITOR’S REPORT To the members of Ramelius Resources Limited • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities 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. 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. RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 72 to 81 of the Directors’ Report for the year ended 30 June 2021. In our opinion, the Remuneration Report of Ramelius Resources Limited, for the year ended 30 June 2021, 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 DDaavviidd NNeewwmmaann Partner Chartered Accountants Perth, 26 August 2021 RAMELIUS RESOURCES ANNUAL REPORT 2021 137 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 11 October 2021 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 Number of fully paid ordinary shares held Van Eck Associates Corporation Vanguard Group 86,794,884 42,747,141 Voting rights 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 11 October 2021 are as follows: Expiry date Exercise price Number of Performance Rights 01/07/2024* 01/07/2025* 11/06/2026* 01/07/2026* 01/07/2027* 01/07/2028* 01/07/2029# 01/07/2030# 01/07/2031# Nil Nil Nil Nil Nil Nil Nil Nil Nil 101,138 129,593 500,000 161,819 1,095,275 2,441,528 2,791,192 1,459,532 1,531,807 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. I L A C N A N I F T R O P E R 138 RAMELIUS RESOURCES ANNUAL REPORT 2021 SHAREHOLDER INFORMATION (CONTINUED) ORDINARY FULLY PAID SHARES (Total) Range of units as of 11 October 2021 Composition: ORD 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 2,999 4,219 2,051 3,233 437 12,939 Units 1,475,789 11,918,610 16,175,578 99,432,067 685,709,968 814,712,012 Minimum Parcel Size Holders Minimum $ 500.00 parcel at $1.4950 per unit 335 1,088 % Units 0.18 1.46 1.99 12.20 84.17 0.00 100.00 Units 134,174 UNQUOTED AND RESTRICTED EQUITY SHARES Fully paid oridinary shares There are no unquoted restricted fully paid shares on issue. Performance rights Details of options and performance rights on issue as at 11 October 2021 which are unquoted restricted securities held by employees as long-term incentives are as follows: Date until securities are vested 01/07/2024* 01/07/2025* 11/06/2026* 01/07/2026* 01/07/2027* 01/07/2028* 01/07/2029** 01/07/2030** 01/07/2031** Number of unquoted securities on issue Number of holders Vesting date Exercise price Exercisable until 101,138 129,593 500,000 161,819 1,095,275 2,441,529 2,791,192 1,459,532 1,531,807 1 2 1 2 5 13 26 29 29 - - - - - - 01/07/2022 01/07/2023 01/07/2024 Nil Nil 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 01/07/2030 01/07/2031 * 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. RAMELIUS RESOURCES ANNUAL REPORT 2021 139 SHAREHOLDER INFORMATION (CONTINUED) Top holders as of 11 October 2021 Rank Name Units % Units J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 1 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 2 CITICORP NOMINEES PTY LIMITED 3 4 NATIONAL NOMINEES LIMITED 5 BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD 6 BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM 7 BNP PARIBAS NOMS PTY LTD 8 9 WEST TRADE ENTERPRISES PTY LTD STRAMIG HOLDINGS PTY LTD 10 NATIONAL NOMINEES LIMITED 11 MR RICHARD ARTHUR LOCKWOOD 12 BNP PARIBAS NOMINEES PTY LTD 13 BNP PARIBAS NOMINEES PTY LTD 14 BRAZIL FARMING PTY LTD 15 16 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 17 CITICORP NOMINEES PTY LIMITED 18 19 MR LEONID CHARUCKYJ 20 MRS AMANDA JANE CROSER PATINA RESOURCES PTY LTD EPOCC PTY LTD Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (Total) Total Remaining Holders Balance 292,616,525 95,938,443 68,886,110 17,745,672 17,202,560 15,344,573 12,171,401 9,500,000 5,515,333 4,674,589 4,500,000 4,390,075 4,079,364 3,610,000 2,525,884 2,139,647 2,081,692 1,954,934 1,886,674 1,710,000 568,473,476 246,238,536 35.92 11.78 8.46 2.18 2.11 1.88 1.49 1.17 0.68 0.57 0.55 0.54 0.50 0.44 0.31 0.26 0.26 0.24 0.23 0.21 69.78 30.22 I L A C N A N I F T R O P E R www.rameliusresources.com.au 

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