Ramelius Resources (ASX: RMS) is the latest WA-based miner to fall victim to heavy rainfall and covid-related labour shortages.
The mid-tier gold miner has been hit from all angles, including persistent rain affecting haulage routes to Mt Magnet and Edna May operations, ongoing staff shortages and lower than forecast grades from the Tampia gold mine.
Ramelius expects to miss its FY22 gold production guidance range of 260,000 to 265,000 oz and revised it down to 255,000 to 260,000 oz.
The downgrade represents a -4.5% to -6.3% decline compared to FY21 production of 272,109 oz at an all-in sustaining cost (AISC) of A$1,317.
Ramelius said that it is currently too early to provide a ‘definitive view’ on AISC for FY22. It chose to stick to its previous guidance of $1,475 to $1,525/oz but flagged costs will likely be at the higher end of the guidance range.
FY22 is expected to be a sharp U-turn from the record setting FY21.
Ramelius set new records across the board last year, including records for production, revenue, net profit and dividends.
With gold prices going nowhere in the last two years, a weaker gold production guidance and costs skewed towards the upside, investors should brace for a tough August reporting season.
Ramelius shares have been moving in-line with the negative news, down -35% year-to-date and -40% in the last 12-months.
Finance Writer & Social Media
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