Ramelius Resources Limited (RMS) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Ramelius Resources Acquisition of Breaker Resources Conference Call. [Operator Instructions]. I would now like to hand the conference over to Mr. Mark Zeptner, Managing Director, Ramelius Resources. Please go ahead.

Good morning, everyone. Thank you for taking the time to dial in this morning. Joining me, as usual, is Ramelius CFO, Tim Manners. As you will be aware, today, Ramelius Resources announced -- recommended off-market, all-script takeover offer for Breaker Resources, who are the owner of the Lake Roe Gold Project located approximately 100 kilometers east of Kalgoorlie and proximal to Ramelius' own Rebecca Gold Project indeed in one of Australia's premier gold provinces. The offer has an implied value of $0.40 per share, comprising 1 Ramelius share for every 2.82 Breaker shares held, representing a 41% premium to Breaker's 3-day volume-weighted share price with similar premiums over the 10- and 30-day ranges. The offer does have the recommendation of Breaker's Board of Directors and Breaker's 2 larger shareholders, the Electrum Strategic Opportunities Fund and Paulson & Co with a combined shareholding of 19.92%, I am told the math is correct there, have also endorsed the offer by signing prebid agreements to accept, of course, in the absence of a superior proposal. For Ramelius, the acquisition of Breaker provides additional scale through regional consolidation with the Rebecca Project, which was acquired through the takeover of Apollo consolidated in early 2022, a bit over 12 months ago. Whilst we've always been confident that Rebecca will develop into a fine stand-alone operation in its own right, the addition of Lake Roe will significantly enhance the development scenario, lifting the combined mineral resource to almost 3 million ounces and providing added production flexibility from a mix of open pit and underground operations that are likely. Lake Roe is a greenfields discovery that has progressively grown to now contain a global resource of 1.7 million ounces of gold. With Bombora -- the Bombora prospect at its core, where the majority of the mineralization has been defined and where more than 324,000 meters of RC and diamond drilling has been completed. High-grade mineralization starts some 5 meters from surface, and the deposit shows predictable and consistent structural controls. The Lake Roe tenement package is extensive, and combined with Rebecca tenure, there's a map in both the release and the presentation that shows this, would give Ramelius control of more than 780 square kilometers of ground at the southern end of the prolific Laverton Tectonic Zone with excellent potential for more discoveries. As many of you will be aware, Ramelius is in the process of undertaking a pre-feasibility study on the Rebecca Project with an anticipated June 2023 completion date. We will -- if successful, we will need to consider exactly what the addition of Lake Roe means for the overall project, but we ultimately see it developing into a long-life asset that's an ideal complement to Rebecca. So with those comments, I'll now pass over to the operator, Melanie to open the line up for questions, please.

Thank you. [Operator Instructions] Your first question comes from Alex Barkley with RBC.

Mark and Tim, just obviously, you were thinking about Lake Rebecca as a stand-alone project sort of trying to get that critical mass of gold. Just -- I know it's difficult to speak to, but with the volume of gold that you just added versus sort of what you would have been trying to get on your own, maybe just if you could add a comment about what you would have needed sort of a like Rebecca to prefer that as a stand-alone. And I mean, possibly, if you could touch on a combined capacity, then may be versus like Rebecca on its own. If you could give any color around that, that would be helpful.

Yes. Obviously, we're in the middle of a PFS, Alex. Thanks for the question. We were always aiming and we've talked publicly about a minimum production profile of 1 million ounces, 10 years at 100. And we believe that Rebecca can deliver that. Obviously, adding Lake Roe probably doesn't increase that production rate, but ideally, increases the longevity of the project and just makes it that much more robust. But ultimately, the studies that we're in and we'll consider what that means for the current studies will tell us the answers in time.

Okay. And you touched on it on your earlier comment, but we shouldn't have any sort of negative read-through for the exploration you were getting at Lake Rebecca? I mean that was all looking fine. You didn't need to add anything on to that project. Is that the right way to think about it?

I think that's a fair way to think about it. A lot of our 35,000 meters that were drilled to date out of a total plan of 75,000 meters, so we're about halfway through that program, has been focused on infill confirmation drilling, sterilization, geotech med test work. We haven't done that much exploration drilling. So it's a little bit early to be judging the exploration potential of Rebecca. So we're still pretty hopeful on that side of things.

Thank you. [Operator Instructions] Your next question comes from [ Richard Hart ] with [indiscernible].

Mark, congratulations on the announcement, another exciting time for Ramelius. Just to clarify what's happening, this is an all-script takeover. So our balance sheet will inherit the $70-odd million cash that Breaker has. Is that right?

Richard, Tim here. Yes, that's correct. Yes, it will.

That's good. I'm not greedy, Tim. I just love [indiscernible]. So again, congratulations. Good luck with all this, as you are aware, I'll be watching closely. Bye.

Thanks, Richard.

Thanks, Richard.

Thank you. [Operator Instructions] Your next question comes from Michael Scantlebury with our Euroz Hartleys.

Mark and Tim, just a quick one for me. Just on the resource there at 1.7 million ounces. Will you be looking to update putting the classic Ramelius slash on those numbers and recutting them for yourself and the kind of timing on that going forward as well?

The classic Ramelius slash, Michael, thanks for the question. Look, we will always ultimately put our stamp on resource numbers. Look, really, I think the important at the end of the day, once we complete the studies will be what we think we can mine. So it's really all reserves and mineable inventory, that's important. I don't see any issues or I haven't heard any issues flagged with the resource in the first instance. But as I said, it comes down to what we think we can include in the mine schedule and mine plan, and we won't know that until we complete the studies.

Your next question comes from Jack Burn, who is a shareholder.

Mark, an interesting deal as well. I'm just wondering with the plant possibly you've build, will you have to increase the size of that at all, do you think, or not?

Thanks for the question, Jack. I think I alluded to earlier that I think 100,000 ounces or thereabouts is a nice production rate. It gives you economies of scale. And that sort of indicates a 3 million tonne mill. So I don't think having Lake Roe necessarily means you'll build a bigger mill, it just potentially means you'll have a longer life. That's my gut feel, but I'm always guided by the technical team who run all the optimization, run all the scenarios to produce basically the best NPV. So we'll see.

Right. Just one last question. Just on the Penny project. Are you running the road trains yet or you still got the B doubles running?

Still got the B doubles. We've got the road upgrade completed. We're just rubber-stamping approvals with Trans and Main Roads and mobilizing the larger -- longer road trains as we speak. So we're going through that process right now. Sorry, we'll likely publicly announce once that's up and running.

Okay. And the trucks are ready to go once you get this?

Yes. Yes. We're mindful that to get new triple road trains, if you wanted them new, they would take some time. So we've got a mobilization schedule with that in mind.

Thank you. There are no further questions at this time. I'll now hand back to Mr. Zeptner for closing remarks.

Okay. Thank you, Melanie. So in summary, we see this is a great opportunity for both Breaker and Ramelius shareholders to take the excellent work done by to date by the respective teams to advance both Lake Roe and Rebecca to their full development potential. We hope that Breaker shareholders come on board with us for the journey and look forward to communicating with you more as we progress. Thank you once again for dialing in this morning.

That does conclude our conference for today. Thank you for participating. You may now disconnect.