Ramelius Resources Limited

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Ramelius Resources Limited has picked a fitting mascot for itself.  Ramelius was the name of a horse belonging to a Saxon nobleman in 938 AD, who tied his horse to a tree while he hunted. Upon the nobleman’s return, he discovered that Ramelius had scraped the earth away to reveal a rich silver-lead vein in what would become a 1000-year operating mine in Germany.

Ramelius the horse was small but mighty—much like the eponymous company, Ramelius Resources Limited.  And both have made significant mineral discoveries on virgin lands.

The Adelaide-based company was founded in 2003 to explore gold and nickel projects in the mineral-rich province of Kambalda, Western Australia.

Fortune shined
Fortune shined on Ramelius in 2005, when the company discovered the Wattle Dam Gold Mine. Drilling results were initially so promising that after two years of open pit mining there was a move from more intensive underground mining operation at the site.  Since its discovery, the mine has already yielded two times the initial estimated pit resource. Conservative estimates predict the mine will produce more than 67,000 ounces by the end of this year.

Results released in October were just what the Ramelius team had been optimistic about. The company announced super gold grades of up to 819 grams per tonne in Wattle. The decision to expand the mine was certainly wise. Ramelius chief executive, Ian Gordon, described the findings as “spectacular, visible gold”. Mr. Gordon believes these are excellent resource enhancements at a time when the company is transitioning from open-pit to underground mine. He says, “The new intersections are significant grade and include super grade results and spectacular visible gold at 37.5 metres in the main resource mining target. The further high-grade gold resources continue at depth at Wattle Dam and as such, we are maintaining the drill momentum to extend this zone.”

Gordon expects full production to be underway in a matter of months. “The mine is currently under development and will be in production in 2010. The grade is expected to be 15 grams per tonne and we are hopeful to get an even better grade than that. In the two mining programs done previously we got higher grades than anticipated.”

Joe Houldsworth, Ramelius managing director, says that production at Wattle is like drilling into a “gold vault”. He continued by saying that Wattle Dam is growing almost weekly, and quickly distinguishing itself from other smaller mining companies. Gordon agrees that the competitive edge for Ramelius is “the grade of our underground mine. We expect it to be one of the highest-grade gold mines in Australia.”

And grow it will continue to do: Ramelius has nearly 300 kilometres in a “sensational” region, close to good infrastructure to support production.

Self supporting
This infrastructure also sets Ramelius apart. The company owns its own infrastructure and processing plant, thereby negating the onus on the company to fully validate resource potential before making decisions to mine underground. Seeing an opportunity to lessen production costs in the long-term, Ramelius bought the 200,000 tonne-per-annum carbon-in-leach Burbanks Treatment plant in 2006, which is only 65 kilometres from the Dam. Owning its own treatment plant forgoes the need to contract the service out and produces revenue by contracting the service to third parties.

Ramelius also enjoys the benefits of the existing West Australian infrastructure. “This whole area has wonderful mining infrastructure in terms of available equipment and technology for mining,” says Gordon.

Legends continue to intertwine with the Ramelius narrative: Ramelius also has the distinct honour of boasting the Eagles Nest prospect on its roster, which is seven kilometres south and a long strike of the Wattle Dam. It is also the site of the legendary discovery of an 1135-ounce gold nugget that was found in 1931.
Ramelius’ success is being recognized globally. Gordon says, “We are still going full steam ahead. We believe we can get a substantial interest in the company.” In fact, heavyweight Canadian investors, Sprott Asset Management, provided a major proportion of a $15 million capital raising strategy.

Golden future
Australia is one of the only developed countries that has been relatively unscathed by the global economic crisis. In fact, Australia actually thrived in the past year, while others downsized and constricted economic development. All of this is was good news for Ramelius. Since 2009, Gordon says capital has been readily available, and at this point it is as if “nothing ever happened. If you lived in Western Australia, you would think the downturn never happened. Western Australia is booming.”

Ramelius has a solid foundation to build a bright future on. With interest growing internationally and prospects that have exceeded even their own high expectations, Ramelius is continuing and ameliorating the tradition of Australian mining

Geology
The Wattle Dam gold deposit is hosted in sheared and metamorphosed mafic to ultramafic rocks. The deposit contains two main lodes, the West Zone and the East Zone, with the bulk of the gold mineralisation contained in the East Zone, a high grade plunging shoot.

Mining
There have been two phases of open cut mining at Wattle Dam in 2006 and 2008-9. Underground mining commenced in May 2009. To date the project has produced in excess of 50,000 oz of gold. 

Milling
Ramelius Resources wholly owns Burbanks treatment plant, which is capable of treating up 200,000 tonnes per annum of Wattle Dam ore.  

Resource Definition
Resource definition drilling programs are ongoing, with both surface and underground diamond rigs operating at Wattle Dam. A program of deep diamond drilling to test depth extensions at Wattle Dam commenced in June 2009.