Ramelius Resources (ASX:RMS) intends to increase exploration spending by 20% in 2023-24 as it strives to transform resources into reserves. The company faced a decline in a key measure during the year to June.
In an update on resource reserves submitted to the ASX on Thursday, Ramelius, which is inching closer to acquiring 88% of Musgrave Minerals in a share and cash deal, acknowledged a decrease in its overall reserves position due to mining depletion in the year ending in June.
Ramelius explained that mining depletion exceeded production significantly because of the removal of mineralized material from pits no longer in operation, such as Tampia and Marda Central, and smaller underground remnants from Mt Magnet that are no longer part of Ramelius’ mining plans.
The company stated, “Drilling-related additions approximately matched production and were primarily due to substantial increases in Bartus East, Symes, and Edna May Underground resources. The acquisition of the Roe project was a significant contributor.”
Ramelius disclosed a total mineral resource of 160 million tonnes at 1.5 grams of gold per tonne as of June 30, marking a 23% increase. The total ore reserves stood at 18 million tonnes at 1.6 grams of gold per tonne, containing 903,000 ounces of gold.
Mineralization for a mine is divided into three levels: ore reserves, which are the best-explored and most drilled, followed by mineral resources indicated and inferred. The latter two are less explored compared to ore reserves due to cost considerations. Miners typically prove a small amount of ore reserves to enable the mine’s start-up and early years, while exploration efforts aim to convert the remaining resources into mineable reserves each year.
Ramelius plans to elevate its exploration spending to $30 million in the current fiscal year, up from $45 million in the previous year, with a focus on converting resources into reserves across multiple projects.
At the Roe project (1.7 million ounces) and Rebecca project (1.4 million ounces), there is an expected study update in early 2024.
Studies for open pit and underground operations have commenced at the Bartus project (202,000 ounces).
For the Penny prospect, Ramelius intends to announce Mineral Resource extensions separately based on results from a recent 13,000-meter drilling program, including data received as of June 30, 2023.
Additionally, the acquisition of the Roe project (estimated at 1.7 million ounces) as part of the takeover of Breaker Resources has significantly boosted Mineral Resources, and work is underway to establish Ore Reserves for this project.