Ramelius Resources is a Western Australian gold miner whose July 2025 merger with Spartan Resources added the high-grade Dalgaranga deposit — one of the richest undeveloped gold reserves on the ASX. At A$4.51 versus our fair value of A$3.81, the stock is overvalued by 15%. The entire investment case rests on one question: is today's A$7,000/oz gold price a permanent new normal, or a cycle peak?

Growth investors are the best fit for RMS today. The 90% production increase to 370koz by FY30 is underpinned by committed capital, Board-approved projects, and 11 years of high-grade reserves at Dalgaranga. This volume ramp delivers earnings growth regardless of where gold settles — making RMS a production growth story first, and a gold price bet second. At the right entry price, the ramp alone justifies serious interest.

Ramelius mines gold from its Mt Magnet hub in Western Australia, with the high-grade Dalgaranga deposit — acquired through the July 2025 Spartan merger — now the centrepiece of its growth strategy. Revenue is almost entirely gold sales, and profitability is driven by the spread between the realised A$ gold price and the all-in sustaining cost per ounce.

The first half of FY26 delivered A$485.6M in revenue and A$347.7M in EBITDA — a 71.6% margin — on 100,300oz at A$4,822/oz realised, still partially constrained by legacy hedges. From April 2026, every ounce sells at spot. With gold above A$7,000/oz, the unhedged second half will be captured in the August FY26 full-year result and could be transformational for reported earnings. The one reservation is Dalgaranga's early mining grade of 3.52g/t against its 7.3g/t reserve model — a reconciliation the market is watching closely.

The production ramp to 370koz by FY30, the best reserve grade in the ASX mid-tier, and a debt-free balance sheet with A$694M cash make this a genuinely high-quality operator. The valuation, not the business, is the problem. At A$4.51 versus our fair value of A$3.81, the stock is overvalued by 15%.

What happened?

FY25 set records across every key metric — revenue A$1,200M, EBITDA A$819M, and 303koz produced at A$3,963/oz. The first half of FY26 built on that momentum: A$485.6M in revenue, A$347.7M in EBITDA, and 100,300oz at A$4,822/oz, still partly hedge-constrained. Production is guided lower in FY26 at 195koz as the Edna May mine transitions to care and maintenance following the Spartan integration — but the gold price tailwind has more than compensated.

What's next?

The most significant near-term catalyst is the August FY26 full-year result — the first to capture a complete unhedged second half with gold trading above A$7,000/oz. EBITDA for that half alone could exceed A$500M if spot prices hold.

Three capital projects run concurrently through FY27–FY28: the 5Mtpa plant upgrade at Dalgaranga (targeting commissioning in September 2027), the Never Never underground ramp, and early works at Rebecca-Roe, which carries a project NPV of A$692M pending environmental approval. Together, these lift production toward 275koz by FY28 and 370koz by FY30. The critical quarterly data point is Dalgaranga's milled grade — each report between now and FY28 will test whether the 7.3g/t reserve delivers as modelled.

What could go wrong?

The dominant risk is a reversion in the A$ gold price. Every A$500/oz decline in the long-run gold price strips approximately A$100M from annual EBITDA. Our base case anchors long-run gold at A$4,500/oz — a probability-weighted blend of a structural scenario (55% weight, sustained A$5,500+/oz) and a cyclical reversion (45% weight, A$3,300–3,500/oz). The market appears to price the structural scenario at 75% weight or higher. If A$ gold mean-reverts toward A$3,500/oz — driven by an AUD recovery to 0.78 on interest rate differentials, or a correction in USD gold — the bear case fair value falls to A$1.88. That scenario carries a 25% probability on our assessment. The margin of safety at A$4.51 is thin: this analysis supports entry at A$3.50 or below for the risk-reward to turn favourable.