The Mt Magnet purchase looks good for Ramelius, and the price...

The Mt Magnet purchase looks good for Ramelius, and the price seems ok.

However, it does have one obvious and significant hurdle to overcome.

The operating cost per ounce is very high at A$825/oz, according to the feasibility study as reported by mining weekly. And of course, going underground could make this even more expensive.

Ramelius buys Mt Magnet mine

This cost would probably not be sustainable over the long term, or at least it may mean that Ramelius's share price will not reflect the value of the gold in the ground because the cost of production is eating up the profits.

Companies like Oceanagold are producing at approximately A$410/oz, which is a whopping 50 percent less per ounce than the estimate at Mt Magnet, so this is really going to become a significant issue for Ramelius, and probably the main reason for Harmony bailing out.

Golden year for Oceanagold

Bringing down the real cost-per-ounce is where the work needs to be done at the moment.

Harmony Gold did not have the fortitude to make Mt Magnet succeed, they sold and bought into New Guinea instead, where their CEO has previous experience.

Harmony gets to New Guinea via Australia

I am confident that if anyone can make Mt Magnet work, then Ramelius can.

I am sure our guys will roll up the sleeves and get stuck in, and importantly, apply some very lateral thinking to these cost issues, and perhaps come up with some smart and novel ideas moving forward.

The next year will be very interesting for all of us shareholders, and perhaps a little bumpy at times, but it should be fun.

I support and encourage our company and management 100 percent.

Cheers
Gw