Release Date: August 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Regis Resources Ltd (RGRNF, Financial) achieved record cash and bullion of $295 million.
- The company generated a record operating cash flow of $475 million.
- Regis Resources Ltd (RGRNF) delivered an underlying net profit before tax of $106 million.
- The company successfully closed out its hedge book, significantly improving profitability.
- Strong ESG outcomes were achieved, including safety, diversity, workplace culture, and decarbonization efforts.
Negative Points
- The Section 10 declaration over the McPhillamys Project led to a $192 million impairment.
- Regis Resources Ltd (RGRNF) had to withdraw the outcomes of the recently released DFS for McPhillamys.
- The company's group oil reserves were reduced from 1.89 million ounces to zero due to the Section 10 decision.
- The decision impacted the socio-economic benefits expected for the Blayney community, including job creation and infrastructure upgrades.
- The company faces uncertainty and potential legal challenges related to the Section 10 declaration.
Q & A Highlights
Q: Can you discuss the catalysts for Duketon and Tropicana over the next 12 to 18 months?
A: At Tropicana, we expect production to lift as the business stabilizes post-rain impacts. The Havana underground project assessment will be a new potential production zone. At Duketon, bringing the Garden Well mine into commercial production will add value, and we are assessing additional underground mines like Ben Hur and Tooheys Well.
Q: With the high gold price environment, is there potential for stockpiles at Duketon North to be used as a feed source at Duketon South?
A: Yes, with the improving gold price, we are currently assessing the potential for those stockpiles to be utilized.
Q: Now that McPhillamys CapEx requirements are out, does this influence potential dividends or cash preservation for growth opportunities?
A: The Board is discussing this. We still have $300 million in debt and have used up our franking credits. So, while dividends are on the agenda, debt repayment is also a key consideration.
Q: What has Regis seen around cost pressures, particularly labor in WA?
A: There is some easing in labor tightness, especially in trade roles. However, finding good talent remains a challenge. Salaries have not reduced, but availability has improved.
Q: Has your appetite for inorganic growth in Australia changed following the McPhillamys ruling?
A: The decision has made us more wary. We continue to look within Australia but are also considering offshore opportunities. The ruling has highlighted the need to reassess sovereign risks.
Q: What are your medium-term production targets for Duketon and Tropicana?
A: For Duketon, we aim for 200,000 to 250,000 ounces per annum, driven by four to five underground mines. Tropicana is expected to produce 120,000 to 150,000 ounces annually until the end of the decade, after which it may settle into a larger underground operation.
Q: Any more color on the debt refinancing and potential inventory write-downs in FY25?
A: We are assessing our debt options, including repayment or extension. Regarding inventory write-downs, predicting NRV movements is challenging, but we have squared up as of June 30, 2024.
Q: What is the base case residual value for McPhillamys, considering freehold farmland and water rights?
A: We have significant land holding values, but the impact of the Section 10 declaration on land usability is still being assessed. We are exploring alternative solutions for the TSF, which could take five to ten years.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
