Ramelius Resources Ltd

ASX:RMS

Earnings Call Analysis

Ramelius Reports Strong Annual Performance and Future Growth Plans

Ramelius Resources produced 293,033 ounces of gold in FY '24 at an all-in sustaining cost of AUD 1,583 per ounce, setting record free cash flow of AUD 315 million. With $446.6 million in cash and gold, the company plans future production of up to 300,000 ounces in FY '25 at an all-in sustaining cost of $1,500 to $1,700. Key projects include Cue and Mt Magnet, where improvements are expected. The Edna May mine will transition to care and maintenance, focusing capital on high-return projects. Safety remains paramount, with no lost-time injuries over the past year.【7:0†source】【7:4†source】.

Strong Production and Record Cash Flow

In the recent earnings call, Ramelius Resources reported a robust performance for the June 2024 quarter, achieving a gold production of over 82,000 ounces and an all-in sustaining cost of AUD 1,362 per ounce. This figure positioned production at the higher end of guidance, while costs fell to the lower end. Remarkably, for FY '24, the company attained a record annual production of 293,033 ounces at an all-in sustaining cost of AUD 1,583. This performance generated underlying free cash flow of AUD 137.3 million for the quarter and an impressive AUD 315 million for the full fiscal year, with AUD 263 million generated in the latter half alone.

Future Production Guidance

Looking ahead, Ramelius has set a promising guidance for FY '25, anticipating gold production between 270,000 and 300,000 ounces, which translates to a significant potential increase of 50% compared to FY '24. The expected all-in sustaining cost for FY '25 will range from AUD 1,500 to AUD 1,700 per ounce. Specifically, production from the Mt Magnet hub is projected to contribute between 230,000 and 250,000 ounces at an estimated cost of AUD 1,300 to AUD 1,500 per ounce. The latter figures highlight an expected improvement in grades and tonnage from operations, particularly at the Penny and Cue projects.

Strategic Developments and Corporate Actions

The company has made significant corporate moves, including purchasing a stake in Spartan Resources, increasing its ownership to approximately 18%. Furthermore, Ramelius renewed and upsized its revolving credit facility to AUD 175 million, enhancing its financial flexibility. The focus on project evaluation is also notable, with the company deciding against a AUD 300 million investment in the Stage 3 cutback at Edna May. Instead, resources will be directed toward care and maintenance, with operations winding down at this site post-processing.

Focus on Safety and Project Development

Safety remains a core priority for Ramelius, underscored by achieving 12 months without a lost time injury (LTI). The progress made in this area reflects the company’s commitment to providing a safe working environment. Upcoming project milestones include the completion of the Cue project's ramp-up and the continued development of the Eridanus site, which holds promising resource potential with updated estimates showing 21 million tonnes at 1.7 grams per tonne.

Financial Stability and Growth Investments

Ramelius ended the quarter with substantial liquidity, holding AUD 446.6 million in cash and gold, alongside the new debt facility of AUD 170 million. The company’s healthy balance sheet facilitates ongoing investments in mine development, with AUD 22.3 million reinvested in Q4 '24, and anticipated growth capital spending for FY '25 pegged at AUD 20 million to AUD 30 million. This is in parallel with increased exploration and resource definition expenditure, estimated to rise between AUD 40 million and AUD 50 million, demonstrating Ramelius’ strategic push for growth in its operational landscape.

Outlook and Shareholder Returns

As the company navigates through the operational and strategic landscape of FY '25, Ramelius aims to deliver on its aggressive growth plans while continuing to provide returns to its shareholders. With the expected transition of ore production from Edna May to Cue, and the ramp-up of production combined with robust grades, the outlook looks promising. The management team’s emphasis on enhancing cash flow generation alongside effective cost management signifies a well-prepared approach to maximizing shareholder value in the year ahead.

Earnings Call Transcript 2024-Q4

[Operator]

Thank you for standing by, and welcome to the Ramelius Resources Quarterly Teleconference. [Operator Instructions]

I would now like to hand the conference over to Mr. Mark Zeptner, Managing Director. Please go ahead.

[Mark Zeptner, executive]

Thank you, Darcy. Good morning, everyone. Thank you for taking the time to dial in to the Ramelius conference call. The call today will cover the June 2024 quarterly results, together with our FY '25 guidance. So in addition to the 2 ASX announcements we made this morning, we have released a presentation that we will largely speak to during this call. All documents have been uploaded on the platform, and it will also be available on our website.

Happy to say today, I'm joined for the first time by Darren Millman, who commenced as CFO in May. Darren will provide some detail on the financials after I run through the highlights in the operations. As usual, there will be an opportunity for listeners to ask questions at the end.

But for those who have downloaded the presentation or have it handy, there is a little bit to get through. I'll be initially speaking to Slide 3.

Our quarterly gold production was just over 82,000 ounces for quarter 4 at all-in sustaining cost of AUD 1,362 an ounce, which was at the higher end of our production guidance and lower end of cost guidance.

In April of this year, we upgraded our annual guidance for FY '24 to 285,000 to 295,000 ounces at an all-in sustaining cost of to $1,550 to $1,650 an ounce. Pleasingly, the record annual production that we delivered for FY '24 of 293,033 ounces at an all-in sustaining cost of $1,583 whilst within our stated guidance again at the higher end of production and the lower end of cost.

Ramelius' underlying free cash flow for the quarter was $137.3 million, breaking the record we set in the recent March quarter. Once again, a stellar performance by our operations. They did -- it's been a remarkable year for Ramelius in many regards, but what has really set us apart has been our ability to generate underlying free cash flow, which for FY '24 totaled $315 million with $263 million coming in the second half alone. Obviously, these results would not have been able to be achieved without our operational teams on the ground. And once again, high praise must go to them for all the hard work they put in to safely deliver this production result.

On safety, a safe workplace is paramount to the success of Ramelius, and the continued downward trend in our TRIFR is evidence of the importance we place on this. Lastly, on safety. During the quarter, Ramelius achieved 12 months without an LTI, once again a testament to our team and our contractors' commitment to safety.

During the quarter, 2 significant milestones were achieved to ensure Ramelius delivers on our 10-year mine plan at our Mt Magnet hub. Firstly, the receipt of key mining proposal approval from DEMIRS for the Cue Project; and secondly, the updated mineral resource estimate for our Eridanus Project consisting of 21 million tonnes at 1.7 grams per tonne for 1.2 million ounces. I'll speak more to both of these shortly.

Firstly, though, to FY '25 guidance, we are expecting another strong earnings year and cash flow year ahead. Production is expected to be between 270,000 and 300,000 ounces at an all-in sustaining cost of $1,500 to $1,700 an ounce.

Mt Magnet will make up the lion's share with gold production between 230,000 and 250,000 ounces and what we believe is a sector-leading all-in sustaining cost of between $1,300 and $1,500 an ounce.

This guidance at the midpoint represents a significant 50% increase on FY '24 and is the result of expected improved grades and tonnages from Penny, along with the positive impact of higher grade open pit ore from Cue. Production will be weighted to the second half of the financial year with grades further improving at Penny and the short period of Cue ramp-up being completed in the first half of the financial year.

At Edna May, we expect to contribute 40,000 to 50,000 ounces, which will be weighted more towards the first half of the financial year. Production will be sourced from existing stockpiles across the hub, and it is greater than initially expected due to the prevailing gold price unlocking value in our lower-grade stockpiles. Darren will discuss cost and capital guidance for FY '25 [indiscernible].

From a corporate perspective, as I suspect everyone is aware, Ramelius purchased an initial stake in Spartan Resources in late June and subsequently increased its interest in July to the point where we are now holding approximately 18% of Spartan's ordinary shares on issue.

We also renewed and upsized our revolving credit facility to $175 million. This facility remains available in full and allows for added financial flexibility.

On the project evaluation front, during the quarter, Ramelius evaluates the potential Stage 3 cutback development at Edna May. It was determined that the project economics are not sufficient to warrant the investment of approximately $300 million, which consists mainly of preproduction mining but also the relocation of ancillary processing infrastructure, a new tails dam and an upgraded pumping system.

The financial commitment required combined with the heightened technical risk inherent in relocating ancillary processing infrastructure and the need for increased pumping capacity at depths that was identified during the recent underground mining phase has resulted in the decision to place the site on care and maintenance once processing of existing stockpiles is completed in the March 2025 quarter.

At the appropriate time and where possible, existing Edna May staff will be offered roles at alternate locations within the company or redundancy packages will be offered. This process has commenced, and the number of redundancies is expected to be relatively few.

If we can move on to Slide 4, I would just like to draw your attention to the table on the left. This breaks down the source of quarterly ounces. In FY '25, we expect similar representation of sources in Q1 and Q2, but as we move to the second half of the financial year, we see Cue replacing the blue components from the Edna May hub as operations wind down there and Cue transitions into full production.

On to Slide 5, which references the group's quarterly production statistics. Here, I would like to highlight the mine and milling grades along with gold production in periods Q3 and Q4 and FY '24 in the charts at the bottom. You can clearly see the step-up in these periods, which we expect to continue for FY '25.

On to Slide 6, we show the operating highlights at Mt Magnet for the quarter and the full year. Production from Mt Magnet hub increased 6% quarter-on-quarter, which is attributable to increased production from Eridanus on improved grades. Offsetting this in part was a lower grade from Penny in the quarter, which I know it was still in excess of 10 grams per tonne. These relatively lower grades were not unexpected and relate simply to mining sequence and the nature of the ore body. Most importantly, the ore body is performing in line with ore reserves, and Penny grades are expected to increase in FY '25, notably in the second half but more on FY '25 guidance shortly. As expected, production for the quarter came mainly from Mt Magnet, which made up just under 50,000 ounces of the group's production.

In terms of open pit mining at Mt Magnet, continued focus was on the Eridanus and Brown Hill open pits, which both had lower strip ratios and higher grades in the preceding quarter, resulting in a 12% increase in contained gold mined to almost 35,000 ounces. The mining of both of these pits is expected to be completed in the September 2024 quarter before the open pit fleet is fully relocated to Cue.

On an underground mining front at our Mt Magnet, mining at St George and Water Tank Hill concluded in the quarter with the sole focus at Mt Magnet now being at the Galaxy Mine. Tonnes and grade mined across the 3 underground operations was in line with the previous March quarter.

During the quarter, key government approvals were received, as mentioned earlier, for the Cue project. And shortly thereafter on the back of compelling returns that we've shown in our studies, we commenced mining at that project. With pre-strip and development activities already underway at Cue, first ore is expected through the Mt Magnet mill in the December quarter. During the short period of development at Cue, mill feed at Mt Magnet will be maintained with the significant Eridanus stockpiles we have on our hand at Magnet, which, at 30 June, totaled more than 3 million tonnes.

Mining at Penny continued as expected in the quarter with development down to the 1,234 level. Stoping performance continued to be optimal and minimal dilution was encountered. And haul roads to Mt Magnet continued to be maintained at a high level, enabling largely uninterrupted haulage, totaling some 56,000 tonnes for the quarter through the first part of winter.

On the project development front, Eridanus and Galaxy underground continued to be the focus areas at Mt Magnet. Resource development drilling, targeting shallow high-grade veining below the current pit at Eridanus produced some excellent results, including 14 meters at 6.2 and 20 meters at 14.5. These results did not form part of the previously updated mineral resource estimate that we released on the 13th of May. As I mentioned earlier, it was 1.2 million ounces, which was up 64% on the June 2023 mineral resource.

The latest mineral resource at Edna May together with continued drilling success has resulted in the commissioning of studies on both underground and open pit options. In parallel to this, mill upgrade is now under evaluation. Both studies or all studies are expected to be completed by December this year. To be clear, these studies have not been incorporated yet into the existing 10-year Mt Magnet Mine Plan.

Separately, at Galaxy ongoing mine development has now reached the sixth ore drive and new Mars decline is developing further at depth, underground diamond drilling targeting the Mars and Saturn ore body was completed during the quarter, with the results including 4.4 meters at 16, 5.7 meters at 10 and 14.5 meters at 6.7.

Resource definition drilling of the Saturn BIF began in the March quarter with assays expected to start feeding through this quarter.

I think I might have mentioned previously that we have completed dewatering of the Saturn pit above, allowing for development to commence within the Saturn ore body itself. Should be seen on the long section pretty clearly.

At Cue, a program of diamond core RC and aircore drilling was completed at the end of the reporting period. The program comprised resource definition infill extension or -- and some geotechnical drilling of the proposed mining areas. And there are a number of them called Break of Day numbers, Leviticus, Waratah and Amarillo open pits as well as some deeper drilling at the Break of Day underground.

Slide 7, I have included a slide on Eridanus. Just to highlight, the previously mentioned mine plan only includes 280,000 ounces at the midpoint, which is the underground option. And in the short term, our highest priority here is to deliver low-cost, high-value return to shareholders from this project as we work through the studies previously discussed.

Last slide for me, Slide 8. We show operating highlights at Edna May for the quarter and for the full year. At Edna May, production was down 19%, which is the result of the completion of mining at the Edna May underground in May.

Now given where we were 12 months ago at the underground operation with significant underground water flows encountered, there's been great effort by the team at Edna May to extract just under 30,000 ounces from the underground across FY '24.

During the quarter, also open pit mining operations concluded at Symes and haulage from 2 Edna May from the Marda, Tampia and Symes satellite sites totaled just over 450,000 tonnes, which was pretty similar to the prior quarter.

We do still have significant stockpiles remaining across the hub, which at 30 June totaled 488,000 tonnes at -- almost 1.6 grams per tonne. In addition to this, it remains almost 1 million tonnes of lower-grade material, which at current gold prices will generate notable cash flows for the business in the coming year.

As always, only touched on a few exploration highlights there. You can find more of the detail within the quarterly report itself. That covers the highlights and the operations from me.

I'll now hand over to Darren.

[Darren Millman, executive]

Thank you, Mark, and it's a pleasure to be here with all you today with this being my first quarterly call. Just wanted to initially acknowledge the great work Ben Ringrose, our GM Finance, has done and as CFO Chair and looking forward to working with him and the executive team to add further value to all stakeholders. I will be initially speaking to Slide 9.

On Slide 9, we show financial highlights for the quarter and the full year. The June 2024 quarter has been another strong quarter for Ramelius, with cash generation a clear highlight. The operations generated cash flow of $162.8 million in the quarter, which after growth capital and exploration spend, resulting in an underlying free cash flow of $137.3 million, building on our record-breaking March quarter. This underlying free cash flow, which is essentially everything except our corporate activity, represents a 49% of revenue for the quarter.

After our initial investment in Spartan in the quarter of $87.7 million and payment of stamp duty on the Musgrave acquisition of $10.1 million, our closing cash and gold was $446.6 million, a 10% increase on March and a 65% increase on June 2023.

During the quarter, we sold 85,737 ounces at an average realized price of $3,243 per ounce, which included a mix of spot and committed forward sales. This resulted in total sales revenue for the quarter of $278.1 million.

The all-in sustaining cost for the quarter was $136 per ounce, which is comparable to the prior quarter. Higher cost at Edna May were offset by the lower all-in sustaining cost at Mt Magnet. The resulting all-in sustaining margin, which is realized price -- realized gold price less the all-in sustaining cost was an impressive 58%, which is slightly higher than the March '24 quarter.

At Mt Magnet, the all-in sustaining cost was just under $1,000 per ounce, representing a further 5% reduction on the prior quarter. This was achieved on the back of lower strip ratio mining and higher grades at Eridanus.

At Edna May, the all-in sustaining cost was $1,870 per ounce, representing an 11% increase on our prior quarter with lower milled head grades following the completion of operation at the Edna May underground. As we have noted in past quarters, the Edna May all-in sustaining cost includes $453 per ounce noncash charge for the drawdown of existing stockpiles across the hub. Ignoring this, the all-in sustaining cost for the Edna May would have been approximately $1,400 per ounce.

For the 2024 financial year, gold sales totaled 293,966 ounces at an average realized gold price of $2,995 per ounce, an all-in sustaining cost of $1,583 per ounce, resulting in gold sales revenue of $880 million and an all-in sustaining margin of over $400 million or 47%.

Total of $22.3 million was reinvested in mine development, resource definition and exploration in the quarter, which focused on the Galaxy underground, Eridanus open pit at Mt Magnet, the Cue Gold Project and Rebecca and Roe Gold Projects.

Our growth capital investment for the year was $49.6 million, which is the upper end of our guidance of $45 million to $50 million and reflective early commencement of the development at Cue in the June quarter.

Exploration and resource definition spend for the financial year 2024 totaled $42.2 million. We are guiding to an increased level of the exploration and resource definition spend of $40 million to $50 million in financial year 2025.

The closing cash and gold position of $446.6 million, which coupled with our new $170 million new debt facility, leaves us with over $600 million in available liquidity. It is not only our cash and goal that points to a strong balance sheet but also our working capital position with sizable stockpiles on hand.

On Slide 10 and 11, now shows a breakdown of free cash flow metrics in 2024 and historically. Ramelius operations generated $315 million in free cash flow in the financial year 2024. I would highlight that financial year '24 production was 293,033 ounces with an all-in sustaining cost of $1,583 per ounce with FY '25 guidance production with an all-in sustaining midpoint at 285,000 ounces and an all-in sustaining cost of $1,600, respectively. These similar levels of production and cost profile will result in continued cash build in FY 2025 together with an elevated gold price and reducing hedge book.

On Slide 12, we show FY 2025 guidance for gold production and all-in sustaining cost. Our all-in sustaining guidance for FY '25 is $1,500 to $1,700 per ounce. At Mt Magnet, the all-in sustaining cost is estimated to be between $1,300 and $1,500 an ounce, which is comparable to both the 10-year plan released in March 2024 and FY '24.

The all-in sustaining cost includes an allowance for plant and gold room upgrades to accommodate the higher grades expected, a preventative maintenance program to secure plant structural integrity and power studies and infrastructure as we look to partially transition to new renewable power sources. With the production of Mt Magnet being weighted to the second half of the financial year, we're expecting the all-in sustaining cost to be lower in the second half compared to the first half.

At Edna May, the all-in sustaining cost is expected to be at the higher $2,500 to $2,700 per ounce, which is relative -- which is reflective of the lower grade in FY '25. Whilst it is acknowledged this is higher cost operation, it is important also to note that the all-in sustaining cost reflects a noncash component of approximately $500 per ounce, reflecting the drawdown of existing stockpiles.

At Edna May, as previously mentioned by Mark, all stockpiles are on surface with no mining required only haulage, so therefore, very low technical risk to deliver these ounces.

Growth capital for financial year '25 is expected to be $20 million to $30 million and relates to the infrastructure and development of Cue. The growth capital is notably less than the 10-year Mt Magnet Mine plan as the mine plan includes an allowance for the development of the Eridanus Underground Mine. We continue to receive very encouraging drill results for Eridanus, which continues to support an attractive underground and open pit options. Further studies are continued to determine the most economic project with results targeted for December 2024.

With that, I'll now pass back to Mark.

[Mark Zeptner, executive]

Thanks, Darren. On the last slide, here, we have summarized our key focus areas for FY '25. The first two, continuing to improve our safety performance and deliver FY '25 guidance, which fits nicely in line with one of our core company values we deliver and we do it safely. Next, we need to be developing the Cue, which we already got a running start on, delivering first ore to Mt Magnet as planned in the December 2024 quarter. As we've mentioned a number of times, completing the Eridanus Underground and open pit studies in parallel with the Mt Magnet processing facility upgrade by the end of the year. Delivering an updated mineral resource for Roe at Roe/Rebecca next month and a combined Rebecca/Roe pre-feasibility study now in the December 2024 quarter. And finally, increasing our exploration drill programs at our portfolio of projects.

So with that, that's the end of the presentation. If we could now open the line up to questions, please, Darcy.

[Operator]

[Operator Instructions] Your first question comes from Andrew Bowler from Macquarie.

[Andrew Bowler, analyst]

Just a follow up -- following up on your commentary around the capital guidance for FY '25, you did mention that you're targeting a study to be released in December for Eridanus. Can we take that to mean that there will be an update to the capital guidance number along with that study? Because to me, it seems either/or underground versus open pit and there will be some capital [ for either option ]?

[Darren Millman, executive]

That's correct, Andrew.

[Andrew Bowler, analyst]

And also, Edna May as well, granted -- you've told us today that Stage 3 very, very unlikely. Now just looking at sort of next steps beyond closure, is it your intention to potentially start a sale process on Edna May? And I guess also just ask a question about the sort of lower-grade stockpiles 1 million tonnes at 0.02 grams, I assume that is directly surrounding Edna May and there's no other stockpiles even lower grade than that, that might make a bit of cash if gold stayed elevated over the next sort of 9 months or so.

[Mark Zeptner, executive]

Thanks, Andrew. I'll answer the second question first. No, the stockpiles are largely on the satellite sites. And my understanding is that, that is all of the low-grade material. There's not really -- the next step from that is essentially waste. So we're going to haul in everything that has got some elements of gold and can deliver our cash flow return rather than worst case, if they didn't make money, we'd have to be rehabbing those stockpiles, but we'll bring them into the mill, and we'll make money.

In terms of Edna May itself, the first step is care and maintenance. We believe we have better capital returns elsewhere within the company, particularly Mt Magnet and also Rebecca/Roe. So a potential sale is one of the options we'll consider, but it's not something we're going to jump to straight away. We'll look to put that on care and maintenance. I think I've always said that, that will be mined at some stage. We just have better options within the business at the moment.

[Operator]

Your next question comes from Paul Kaner from Ord Minnett.

[Paul Kaner, analyst]

Maybe just further to Andrew's question on those study updates at the end of the year. Just on Magnet and that potential mill expansion, I guess what do you need to see from Eridanus or any other deposits to justify an expansion? I mean there's probably going to be some enhancements done regardless, but do you need to go ahead with the open pit cutback to justify expansion of the throughput?

[Mark Zeptner, executive]

Yes. Good question. Thanks, Paul. Yes, you're spot on. The mill expansion is primarily related to the open pit option. I think the current pit shell producing 12 million tonnes at 1.5 grams with already a plus 10-year plan in our mind in the first instance, anyway, it makes sense, to potentially take the mill from 2 million tonnes to something like 3 million tonnes to bring in that additional open pit material.

If the underground option proves to be more attractive and I think in the first instance, it will be bigger than the 280,000 ounces that's in the current mine plan, it may not precipitate a mill upgrade. And our initial view on the mill upgrade is that it won't be exorbitant given that it previously ran at a higher rate. It's configured for a higher rate. And it's really just a few new key pieces of infrastructure to bring that higher rate about. I hope I answered your question. Thanks, Paul.

[Operator]

Your next question comes from Paul Wiggers de Vries from RBC.

[Paul Wiggers de Vries, analyst]

Just a few, maybe this is best for Darren. Just a little bit around the tax expectations for next year. You sort of guided to $80 million to $100 million. Could you just run through a few of the key assumptions for that? Is that a gold -- especially maybe around gold price?

[Darren Millman, executive]

Yes. I think we've got using about $3,250 for our gold price internal budget assumption. So that's the basis of that number. And yes, that's just sort of [ due to be ] paid in the third quarter of 2025.

[Paul Wiggers de Vries, analyst]

And a little bit on Penny. Was there a little bit more development material that was mined this quarter than expected?

[Mark Zeptner, executive]

Look, I think so. And it also depends where you are in the ore body. The most important thing is that it's performing to the reserves. So it's higher grade in the center of the ore body. And as you get to the flanks, like I know there was some development out on the northern end. And as you get out towards the end of the ore body, you have some lower-grade material. And the reality is you can have grades that can range from 3 grams to 25 grams, and it just depends where you're mining in the quarter. So the fact that it was lower and still above 10 grams, there's no issues in our mind.

[Paul Wiggers de Vries, analyst]

No. You're sort of crying over spilt milk. That's exceptional grade anyway.

[Mark Zeptner, executive]

Exactly. Thanks.

[Operator]

[Operator Instructions]. Your next comes from Adrian Rauso from West Australian.

[Adrian Rauso]

So yes, Simon Lawson believes that Ramelius likely doesn't have the firepower anymore to take Spartan out. I mean, do you agree with that? And if not Spartan, where will the immediate growth come from in the business?

[Mark Zeptner, executive]

Thanks, Adrian. I won't comment on other people's opinion of our firepower. But I suppose it's probably pertinent to talk about the Spartan investment. And an opportunity did present itself for us to secure a strategic stake. Our technical team looked at publicly available information, and we thought that was a justifiable allocation of capital, albeit Never Never is relatively new defined and it's relatively early stage development project.

We were pleased to see that the recent mineral resource update validated our technical team's view and presented no surprises from our perspective on the size and the grade of the resource. So as a shareholder, we're pleased with our on-paper returns, but we recognize there's still a way to go to realize full value from that asset.

In terms -- so I think in summary, whilst we'd like to have Never Never in our portfolio, we actually look at it as a nice to have rather than a need to have. We've talked a lot on this call about our organic growth potential at Mt Magnet over and above what is as well as our Rebecca/Roe project east of Kalgoorlie. So we have a number of internal growth projects over and above M&A options, and we can debate how much firepower we have available to throw with those.

[Operator]

[Operator Instructions] Your next question comes from Richard Hart, private investor.

[Richard Kenneth Hart]

As an investor, Ramelius just goes from strength to strength. And congratulations, Darren, on your first presentation. The query I have probably follows on from the Spartan question. As an investor, I'm not completely aware of what happens with mergers, acquisitions, takeovers. It might sound naïve, but the question is with 18% as a holding, I know that won't give you rights about maybe policy, does it allow any influence on policy for Spartan that is?

[Mark Zeptner, executive]

Thanks, Richard. We're obviously a major shareholder. We obviously like what Simon and the team have done. It's not often you see new or high-grade ore bodies discovered. So they've done a great job, and we're obliged, I think, in the first instance, to sit and watch for a period of time. And I think we're encouraging Simon to keep doing what he's doing and keep growing and adding value. So our influence at the moment is limited, and we're watching with a lot of interest and do our own work while he gets on with his work at Dalgaranga.

[Richard Kenneth Hart]

That's sort of the answer I expected. And I'm sure Simon knows how valuable your input would be if he were to accept it.

[Mark Zeptner, executive]

You'd have to ask Simon that, Richard, but thanks for the question.

[Operator]

Your next question comes from Jarrod Lucas from ABC News.

[Jarrod Lucas]

Congrats on the quarter. I just wanted to how many workers were at Edna May since underground mining finished up in May and those satellite operations. And of those, you mentioned that you'd keep redundancies light on.

And just a second question, I remember back in 2017, when you boarded Edna May, you paid the $40 million up-front and then there was another contingency of potentially up to $50 million royalties to Evolution if Stage 3 went ahead. Is that what tipped the scales in terms of the project economics not quite stacking up?

[Mark Zeptner, executive]

Thanks, Jarrod. Last number I saw on the employees at Edna May is around 70. And obviously, they're mainly milling and some admin and haulage related. The operations team and HR team has done a great job relocating, to date, people from our Tampia, Marda and Symes and some people from Edna May itself. So as things wind down there, we will look to relocate elsewhere in the business and obviously look to minimize redundancies, but that's sort of the number that we're talking about as of today.

In terms of what we paid for the Edna May asset back in 2017, which has been a good asset for us for like over 7 years now, almost 7 years, we paid the $40 million up front. I believe we paid about another $15 million or so in royalties. So it's cost us $55 million. There is a balloon payment for Edna May Stage 3 of around $20 million. And to be frank, $20 million is not going to sway it one way or another. I think it's more the total investment compared to other options within our portfolio that has made -- what has been used as the basis of our decision rather than solely the balloon payment as part of that original purchase.

[Operator]

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

[Mark Zeptner, executive]

I think I've said enough today. The only thing I'll say is thanks for listening in this morning, all, and enjoy the rest of your day. Thank you.

[Operator]

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