Thanks, man, for the reply but sorry I do not buy your thesis...

Thanks, man, for the reply but sorry I do not buy your thesis that Ramelius would set aside extraction of high grade ore from Galaxy underground to go after lower grade stuff from Eridanus open pit. True that open pit extraction should typically have lower opex than underground extraction but Ramelius has indicated upfront capex of north of $350m for Eridanus open pit plus another $95m to expand the Checkers mill. Spending a penny to make a penny at Eridanus open pit for sure but that does still not explain what has happened to the sparkling promise of high grade ore from Galaxy.

As it happens, I think I might have worked it out for myself. It is not the ore from Galaxy underground that vanished but the ore from Eridanus underground under the 2024 mine plan that has mostly been replaced by the ore from Eridanus open pit under the 2025 mine plan.

Here is a chart from the Ramelius Mt Magnet 2024 mine plan announcement, from 12 March 2024. This shows for instance that the Mt Magnet sourced ore in FY27 was to consist of 59koz of gold from underground at Eridanus and 2koz from open pit Eridanus plus 41 koz from underground at Galaxy, totaling 102koz extracted from Mt Magnet. That number agrees with the total FY27 number for Mt Magnet that Mark Zeptner presented at Diggers last August.


What changed in the new Mt Magnet mine plan that Ramelius presented a couple of weeks ago is that the previous estimates for Eridanus open pit and underground have vanished and are replaced with the new much more expensive plan for Eridanus open pit. In koz terms in the nine years to FY34 Ramelius has "disappeared" 121 koz of open pit Eridanus gold and 269koz of underground Eridanus gold and replaced that with 471koz of expanded open pit Eridanus gold. This comes at an additional upfront capex of $351m. Also, production and therefore net cash flow is pushed towards the back end of that period (so becomes less valuable).

So, for an additional $351m (the mine) + $95m (the mill) spend we get an additional 81koz of gold from Eridanus up to FY34. FMD, that does look like we are paying premium prices there ... it almost makes the very mediocre Rebecca Roe numbers look good.

My view is that if Ramelius manage to snare Spartan it will be a company maker for them. I also consider Mark Zeptner and his team to be top notch operators of gold mining ventures - not only in getting the best out of operations but in optimising the hub and spoke model for a number of years. However I also continue to consider the post-Bob Kennedy post-Michael Bohm Ramelius board to be below par. Looking directly at you, Bob Vassie. Vassie and his board made an awful drawn-out muck up at Edna May, they threw good money after bad by buying Breaker to cover for the woeful Rebecca decision and they should be drawn and quartered for not following through on the prescient warning Mark Zeptner gave in 2020-21 that Ramelius needed to acquire a third hub (true, finally they might be getting that third second hub but at a cost of about $2b).