Ann: Record quarterly gold production for Ramelius, page-73

I note a few comments on here about RMS current share price (the "too high - I'm out" camp vs the "too cheap" camp). As a starter, I am in the latter camp and thought it worth putting some maths around the topic of valuation.

As of the most recent announcement, RMS has $407m of cash and gold and delivered $125m generated cash for the quarter. I will ignore the generated cash for the moment and focus more on forecast annualisd EBITDA.

1. Current market cap is circa $2,200m - so deduct cash and enterprise is being valued at circa $1,800m.

2. Forecast FY24 EBITDA is around the $390m mark following the Q3 results. Current share price (net of cash) about 4.6x EBITDA. As of 30th June with a further $120m cash in bank, it is around 4.3x multiple.

3. Forecast FY25 is around the $580m mark. If we apply a 4.5x multiple, then implies a valuation of $2,610m + $520m cash = EV $3,130m or about $2.75 per share.

4. Peers are trading at around the 6x EBITDA multiple = valuation of $3,480m + cash = $4,000m or about $3.50/share (which is incidentally also my target based on technical analysis).

Note that the above FY25 forecast (source Ord Minnett) was when the gold price was circa US$2.100 vs the US$2,400 currently. Allowing for hedging, if current prices are maintained, there is a further $80m of EBITDA potential or (at 4.5x multiple) a further 30c+ per share upside.

For the above reasons, I think there is much more to play out in terms of RMS share price in the coming months.

At the moment Mr Market is just oscillating around the $2.00 mark which is normal as a stock approaches a "big" figure - often an initial break of the figure, a pullback below the figure, then a surge through the figure and then another pullback to test the figure before moving forward. We have had the first 2 components and I believe we are just now setting up to surge through the $2.00 barrier.