Regis swings back: ‘much more than just McPhillamys’

Regis Resources (ASX: RRL) has responded to the dominating discussion around the McPhillamys decision in its Q1 FY25 report, highlighting its next steps and opportunities beyond the $1b mine.

A section 10 declaration under the Aboriginal and Torres Strait Islander Heritage Protection (ATSIHP) Act 1984 was made over the proposed tailings storage facility (TSF) in August, which Regis says renders the project unviable in its current form.

Regis Resources managing director Jim Beyer says the site still has the potential to be a robust project with low operating costs and significant leverage to the spot gold price.

“However, based on our extensive industry experience, our view is that it could now take between five to ten years to develop a viable TSF alternative, assuming we can establish one,” he said.

“To that end we have commenced a very early concept study to develop this multi-year programme of work.

“At the same time, we are fully evaluating our legal options regarding this surprising and disappointing decision.”

This decision forced the gold miner to take out a $192m impairment and withdraw 1.89moz in ore reserves.

Despite the McPhillamys fallout, Regis has returned to a healthy cashflow position, with cash and bullion increased by $85m up to $380m, following a $50m capital expenditure investment and $4m spent on McPhillamys.

“Regis is much more than just McPhillamys, and I am very pleased to say that the rest of our business is running well and generating strong cashflows,” says Mr Beyer.

“Our assets performed in-line with plans and the development of our other growth projects remain on track, establishing a solid position for the remainder of FY25 and well beyond.

“Our quarterly results clearly demonstrate the significant cash generation capacity of the business with cumulative cashflows of $85m for the three months.

“This strong result gave the company, at the end of the September quarter, $380m of cash and bullion with a balance sheet that is now positive $80m.

“With our FY25 production and cost guidance maintained and a gold price remaining at levels of over $4,000poz, we have the clear potential to deliver further significant amounts of cash to our balance sheet, a situation that positions us well and broadens our options for the next stages of our growth.”

Gold production is on an upwards trajectory, with production for the quarter totalling 94.5koz at an AISC of $2,495poz. Duketon South was responsible for 57.5koz, while Tropicana produced 37koz.

Regis has more growth opportunities coming down the line, with approval from the Tropicana Joint Venture for development of the Havana Underground mine and development commencing during Q1.