The stars are aligning for Perth-based gold miner Ramelius Resources as it enters what is shaping up to be a stellar financial year.

Its operations centred in the Northern Goldfields notched up a substantial increase in production to June 2016 year-on-year, from 88,000 ounces to 110,000oz of gold, and managing director Mark Zeptner forecasts the next result will be even better.

“We’re a gold producer with increasing production and we plan to produce 135,000oz in the year to June 2017,” he said.

“Importantly, we now have a new, four-year life-of-mine due to extensions at our existing operations, so we’re increasing production, and our life-of-mine, which we haven’t done for a while.”

Ramelius’ Mt Magnet mill is currently fed from its adjacent Galaxy mine’s series of open pits and two, new high-grade mines near Leinster – Kathleen Valley and Vivien.

“Vivien is now at full production and we’ve still got Kathleen Valley running, so it’s when all the stars line up to give us the best production this year,” Zeptner told Mining Journal in July.

Mt Magnet’s confirmed future is also in the stars – the new Milky Way deposit is giving the company the sought-after life-of-mine extension out to four years.

Milky Way’s maiden 241,000oz JORC resource was announced in May. The deposit lies under an open pit that was mined until 2000 by a previous owner and is just 3.6km from Ramelius’ Checker mill at Mt Magnet.

Zeptner said the Milky Way discovery represented a “quantum shift” for Mt Magnet’s life-of-mine plans and also demonstrated the significant porphyry potential that remained in the area.

The company was working to establish an ore reserve and has slated Milky Way for production in 2019-20.

Meanwhile, three new mines are coming into production at Mt Magnet as the long-running Percy (Perseverance) pit at Galaxy winds up in September.

Mining has just begun at Galaxy’s Titan pit, Blackmans will be another open pit 30km to the north, and Water Tank Hill will be the first underground mine at Mt Magnet since Ramelius commenced mining in 2011.

Blackmans has a 2g/t ore reserve for 16,000oz and will be mined in less than 12 months, while Water Tank Hill/St George has a total ore reserve of 335,000 tonnes at 4.9g/t gold.

Zeptner said Water Tank Hill was on the outskirts of the town of Mt Magnet and its high grade and close proximity to the mill meant it was likely to be the company’s lowest-cost project.

“It would be easier to mine at Mt Magnet if it was one huge pit but that’s the nature of the beast up there,” he said.

“It’ll be good to get back underground and have mixture of open pit and underground mines, and it’s the sort of field that lends itself to that.

“We were underground at Wattle Dam, Ramelius’ company making mine, and we’re underground at Vivien, so we have the open pit and underground skills for small to medium-sized operations.

“Our mines may be on a scale that the big guys aren’t interested in but we’ll pick them up and make them work.”

He said more drilling was planned at Water Tank Hill to potentially extend the project.

“As it stands, it will currently make about A$30 million in its two-year period so it’s pretty lucrative, we just want it to have more life,” Zeptner said.

Almost half of the company’s $10 million exploration budget is being spent at Mt Magnet and Zeptner is confident the project’s life will increase – not to mention the company’s potential at its other exploration projects in WA and in the Eastern States.

“The lion’s share is going to go into Magnet to extend the life there, we’re looking for more Milky Ways and we’ll be drilling under the Galaxy pits looking for underground opportunities,” he said.

Within a month of establishing Milky Way’s maiden resource estimate, extension drilling has intercepted highlights 3m at 21.68g/t gold and 20m at 5.85g/t gold.

Ramelius has also identified new prospects, Stellar West and Brown Cow within 1km of Milky Way, which Zeptner said demonstrated the under-explored, highly prospective nature of the Boogardie Basin. 

Recent drilling highlights include 14m at 3.96g/t gold at Stellar West and 7m at 7.36g/t at Brown Cow. 

Zeptner said $1 million was also earmarked to drill within and below the current resource envelope at Vivien, where exploration highlights include 3.5m at 7.6g/t gold.

Vivien has already over-performed in tonnes and grade in its initial months of production and by late June had produced 22,332 tonnes at 8.02g/t.

“We’ve got increased confidence that the mine, which has just gone into stoping now, will still be open in four years,” Zeptner said.

“Our priority is on our operations and their extensions but we always try to keep options open to finding something decent outside of that.”

The company has greenfields projects in Queensland and the Northern Territory, where it has earnt an 85% stake in a joint venture with Tychean Resources at the Tanami Gold Project.

Zeptner said they had just been granted access at Tanami and early stage exploration was underway.

In the two years he’s been at the helm of Ramelius, firstly as CEO and now as managing director, Zeptner said there had been many highlights to date. 

The company is debt-free and has forward sold gold to the end of 2017 while keeping half exposed to the rising spot price.

“We’ve built up our cash position from a low point in mid-2014 of A$15 million to closer to $50 million and we’ve done that without significant capital raising,” Zeptner said.

“We’ve built the share price from a low of 4c to about 46c. 

“The guys have got better and more efficient at running the mill – it has a sub-A$20/tonne operating cost which is super competitive.

“On almost every metric whether it’s been enterprise value per production ounce or resource ounce, we’re below average which gives us a fair bit of scope for a share price increase.

“And our new life-of-mine should give investors greater confidence.”

Zeptner is keen to meet with potential institutional investors on an overseas trip this month.

“I’m looking forward to sharing our story,” he said.

“We have our operations running smoothly and we’ve increased our life-of-mine significantly.

“There is probably no better time to be an Australian gold producer.”