Ramelius Short Interest Doubles in a Month Before AGM

Ramelius Resources reports on 25 October with its stock down 7% over the past month to A$3.53, and short sellers have been notably more active than usual in the weeks running up to the announcement.

Short interest has nearly doubled since late September, rising 74% over the past 30 days to reach 1.8% of the free float. The weekly pace has accelerated sharply: a 39% jump in the past five trading days is roughly 2.4 standard deviations above the company's typical weekly move over the past year. That is an unusual burst of short-side activity for a stock that has historically carried a low level of short interest. The official FINRA settlement figure, struck as of 16 October, shows 35.2 million shares short with 4.1 days to cover, broadly consistent with the daily estimate.

The lending market does not yet reflect distress, though. Availability remains extraordinarily loose at 2,438% of short interest, meaning shares to borrow are plentiful relative to the amount already borrowed. Borrowing costs are minimal at 0.69% per year, down slightly on the week. The lending side of this story is relaxed; the demand side is the anomaly.

Where RMS has held up relatively well is in its price performance versus the peer group. The stock fell 0.6% over the past week, while closest ASX gold peers EVN, GMD and RRL fell between 3% and 7% over the same period. WGX was the exception, gaining 6%. The gold sector has been broadly weak, and Ramelius has weathered that relative to several direct competitors, even as the short interest build runs counter to that resilience.

Analysts maintain a mean price target of A$5.21 against the current price of A$3.53, a gap of around 48%. No recent target changes are on record in the past few weeks. Insider activity from late September shows three directors, including Robert Scott Vassie, making modest open-market purchases at prices between A$3.75 and A$3.96, small in aggregate but directionally at odds with the short-side build.

The October quarterly production report will test whether the operational numbers justify the spread between where the stock trades and where analysts believe it should be priced.