AT the 2019 annual general meeting in November, Regis’ non-executive chairman James Mactier told shareholders the year had been a profitable one.
“This year was one of significant achievement and change for Regis and I am pleased to report, another very profitable one,” Mr Mactier said.
“Net Profit After Tax of $163.1m, despite being slightly down on last year, was a commendable achievement.
“Record revenue from increased gold production and a higher realised gold price was offset by increased costs primarily due to increased strip ratios and industry-wide cost pressures.”
Additionally, a non-cash write-down of some previously capitalised exploration expenditure was taken.
“Our strong profitability, cash flows and outlook, enabled the board to declare fully-franked dividends for the year totalling $81m or 16c per share, continuing Regis’ industry-leading performance,” Mr Mactier said.
“This brings total dividends declared by Regis to $407m and $1000 invested in Regis 10 years ago with re-investment of dividends, is now worth over $12,500.”
Highlights for the year included record gold production and strong financial metrics generating industry leading dividend returns, reserve replacement at Duketon, development of the first underground mine at Rosemount and near-mine and greenfields exploration of drilling 1200m below the Rosemount pit.
Smooth operations
Regis Resources has been performing reliably and is progressing on several future growth-related projects for 2020.
The Duketon Gold Project in WA returned a solid performance in the September 2019 quarter with production of 87,633oz of gold – 22,743oz from Duketon Northern Operations and 64,890oz from Duketon Southern Operations.
This was marginally down compared to the June quarter production of 90,966oz.
The Rosemount underground mine reached first ore in the September quarter and mined significantly above expectations of 10kt of ore.
The planned increased development rate for the mine requires a second development jumbo which has been mobilised and will be put into operation in the December quarter.
The first phase of stope definition diamond drilling was completed in September with drilling concentrated on the upper section of the South Zone.
The drilling results are being evaluated and used for detailed ore development, and stope design with first stoping ore is planned for the March 2020 quarter.
Regis Resources managing director Jim Beyer was confident the satellite pits would supplement existing operations.
“Looking forward we expect reliable performance from the existing Duketon Operations and a gradual introduction of new production coming from Rosemont Underground and new satellite pits,” he said.
With the increase in high grade material from the Rosemont underground and currently planned open pits, gold production over the next three years is expected to lift, by about 10pc above the current level to about 400,000oz by FY22.
Greenfields exploration
Mr Beyer said the company expected to see results from greenfield exploration work across its Duketon tenements in the new year.
“Our organic growth potential through exploration was given a major boost when the company acquired a large strategic tenement holding across the Duketon Greenstone Belt,” Mr Beyer said.
“This acquisition tripled the company’s landholding and means that Regis now controls about 90pc of the gold rights in the highly prospective belt.”
The previous tenement holding encompassed 194 granted exploration, prospecting and mining leases across 991sqkm, and four exploration licence applications over 227km2.
The new expanded holdings result in a contiguous tenement area of more than 3265sqkm.
Regis has begun reviewing the extensive data package including advanced gold prospects and is undertaking a methodical but aggressive exploration program during the December quarter of regional surface sampling, and will commence drill testing the best gold targets as soon as practical.
During the September 2019 quarter, a total of 49,876 drill metres was completed.
This work focused on drilling at depth for extensions to gold mineralisation beneath existing gold deposits at Garden Well South, Gloster, Moolart Well, Baneygo and regional exploration drilling at Murphy Hills, Fisher Well, Matt’s Bore, and Little Well.
McPhillamys Project
The 100pc Regis-owned McPhillamys Gold Project in NSW is one of Australia’s largest undeveloped open pittable gold resources, with the company submitting its Development Application and Environmental Impact Statement for the project in July.
The Definitive Feasibility Study (DFS) is progressing and will be updated to further refine the operating parameters, estimated capital and operating costs and a development timetable (subject to completion of permitting).
Regis continues to progress the water supply agreement and refine the pipeline route access to utilise recycled water from the Mt Piper Power Station and Centennial Mine near Lithgow.
An additional change in scope for the DFS is the consideration in the study of the potential Discovery Ridge satellite project (located 32km away from McPhillamys) where recent drilling confirmed the significant potential of this Project.
Discovery Ridge continues to shape up as a very significant additional value proposition for the McPhillamys Project and work is currently underway on a maiden reserve estimate.
“With the Company’s transformational McPhillamys Gold Project in New South Wales making steady progress, the outlook for our company is very exciting,” Mr Beyer said.
Leadership changes
The year also saw significant change of leadership and personnel, with Steve Scudamore appointed a Non-Executive Director in May and Jon Latto joining the company as Chief Financial Officer and Company Secretary in July.
Mr Mactier publicly thanked outgoing personnel Ross Kestel, Mark Okeby, Paul Thomas and Kim Massey for their efforts and contribution.
“Individually and collectively, they made a very significant contribution to the growth and success of Regis in so many ways,” he said.
“They have helped lay a very strong foundation upon which we continue to build. Change and renewal is inevitable in any organisation and should be embraced for the new skills, experience, ideas, perspectives and opportunities that come with it.”
Lynda Burnett also joined the company as a Non-Executive Director, bringing experience in gold and other metals exploration, both in terms of the underlying science and the management of exploration teams and budgets in Australia and around the world.
“This included an involvement with the discovery of our McPhillamys deposit,” Mr Mactier said.
“With our renewed focus on exploration and significantly increased exploration tenure, Lynda’s insight and experience will be extremely valuable.
“We continue to invest in growth through significant exploration expenditure and capital investment as well as an active but disciplined business development effort. We remain focussed and prudent in our operations, financing and strategy.
“We have significant upside exposure to a rising gold price with more than 8m oz of gold in resources, including 4m oz in reserves.”
Looking to 2020 and beyond, Regis is in a strong financial position, which Mr Mactier stating was down to Mr Beyers’ leadership.
“Significant change and achievement doesn’t come without challenge and the Board has been extremely pleased with the manner in which Jim and his team have managed and led Regis this year,“ he said.
“We look forward to another safe and successful year.”
