Investors take note: Ramelius Resources is back in town.

That’s the message from the established miner which in fact never disappeared, unlike some who were badly hit by the volatile equities market and falling gold price a couple of years ago.

But Ramelius has stuck to what it does best – making its gold projects profitable and pursuing high margin deposits.

The company returned to profit at the end of December 2014, with zero debt, a cash balance around $A35 million and managing director Mark Zeptner is aiming for greater heights. Ramelius intends to be profitable in a low gold price environment, discover a new high-margin asset within two years, lift its production above 100,000 ounces a year and maintain a strong focus on capital management.

In the June quarter 2015, the company approved two new gold mines near Leinster – Vivien and Kathleen Valley – both of which have all-in sustaining costs below $1000/oz. The company has moved quickly to get the pair into production in less than 12 months, after acquiring Vivien from Gold Fields in July 2014 and Kathleen Valley from Xstrata Nickel Operations two months later.

Vivien has a three-year mine plan to date and a current resource of 805,000 tonnes at 7.1gpt gold; while Kathleen Valley has an 18-month mine life and a reserve grade of 4.1gpt.

Zeptner said Ramelius had deliberately sought high-grade projects rather than longer-life, low-grade possibilities, as the ore will be trucked about 300km to the company’s wholly owned, low-operating-cost Checkers Mill at Mt Magnet. However, the company anticipates extending both new mines and making further discoveries, with production above 100,000oz of gold per annum expected by the end of fiscal year 2016.

Zeptner is confident of extending Vivien’s current mine life given numerous high-grade hits outside the current mine plan, such as 2.6m at 18.1gpt gold.

“And even if Kathleen Valley stays at 18 months life, it’s still quite an attractive project financially,” he said.

Kathleen Valley requires a very low $1.5 million in upfront capital and is expected to produce an undiscounted cashflow, at $1500/oz, of $27.8 million.

“We went through a tough couple of years with the initial part of our Mt Magnet project,” Zeptner acknowledged.

“But we have that working more efficiently and, with the new projects we recently started, it means we’ll be back producing above 100,000oz by the end of the 2016 financial year and growing from there on.

“We like to think we’re back in the game – we’ve got some really good things to look forward to.”

Ramelius was previously best known for its high-grade Wattle Dam gold mine south of Coolgardie, which over six years produced 274,000oz of gold from its open pit and underground operation with an average grade of 10gpt. The company put this experience to use developing its Mt Magnet gold operations, which achieved near-record production in the March quarter of 22,655oz at a cash cost below $1000/oz.

Ramelius acquired the 225sq.km Mt Magnet project from Harmony Gold (Australia) in 2010 and restarted operations a year later. Zeptner said with five consecutive quarters achieving production guidance at Mt Magnet, the company’s turnaround was now in full swing.

Mt Magnet’s Saturn and Mars pits are nearing completion but Ramelius is already transitioning to the neighbouring Perseverance pit, and has also identified a new source of oxide feed at Blackmans, 30km to the north.

Blackmans’ maiden resource of 490,000t at 2.5gpt for 39,000oz was announced in June and there are high-grade intersections including 10m at 15.7gpt below the current resource.

Zeptner said evaluation and permitting work was underway with an aim to add Blackmans as an open pit to the Mt Magnet operations in calendar 2016.

“The overall production profile published by Ramelius does not currently include any contribution from Blackmans, and the fact that we have some excellent intersections that currently sit outside the mineral resource, highlights the potential positive impact that this project may have on the company’s future gold production,” Zeptner said.

As part of the company’s focus on getting Vivien and Kathleen Valley into production, Ramelius has forward sold about 40% of its forecast gold production for the next two years at an average price of $1570 an ounce.

It has also negotiated a $10 million finance facility with the Commonwealth Bank of Australia, but Zeptner says the company’s strong cash position means this may not need to be drawn upon. Now that both new mines are underway, Zeptner says the company can turn its attention to developing other opportunities.

“We’ve spent what we think we could afford on exploration which is about $4 million a year,” Zeptner said.

“We’re drilling around our current operations but also in New South Wales, Queensland and more recently the Northern Territory, so we’ve got a fairly large suite of projects but they’re hopefully relatively low cost and high reward.

“If you don’t drill any holes you’re not going to find anything.”

He said exploration and business development manager Kevin Seymour was constantly scanning the landscape for opportunities the bigger miners may have missed. Back in WA, Zeptner has high hopes of finding another high-grade gold deposit in the Goldfields and bringing the company’s Burbank mill at Coolgardie out of care and maintenance.

Ramelius’ Coogee mine, 25km northeast of Kambalda, recently produced about 22,000oz from 5gpt material over 12 months.

“We were pretty happy with the Coogee pit, it made over $10 million in a $1400 gold price environment,” Zeptner said.

“We don’t think there are extensions to the pit itself, but there are some interesting anomalies and intersections on the lease there. We should know by the end of this year if we have a Coogee Mark II.”

Zeptner said Ramelius represented great value to investors as it had built an unrivalled position to grow its business.

“We’ve got a cash balance that’s half our market cap with no debt,” Zeptner said.

“We’re setting ourselves up so we can be profitable in a lower gold price environment, we’re growing our production, we’re doing exploration and we’re focused on having a robust cash balance.

“We are a gold producer, we’re coming back above 100,000oz production by the end of next year and growing from there.

“Ramelius is back in town.”

*A version of this report, first published in the July-August 2015 edition of RESOURCESTOCKS magazine, was commissioned by Ramelius Resources.