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Regis Resources ready to shrug off hedge book woes as it posts after-tax loss in first-half of 2023-24 year

Neil WatkinsonKalgoorlie Miner
Regis Resources managing director Jim Beyer.
Camera IconRegis Resources managing director Jim Beyer. Credit: Kelsey Reid/Kalgoorlie Miner

Regis Resources is looking forward to boosting cash flow after finally shedding its hedge book constraints in the first half of the current financial year.

Regis posted a statutory net loss after tax of $92 million in the half-year to December 31, which included a hedge delivery cost of $81m and final hedge book close-out costs of $98m.

The result compared with a loss of $30m during the the same period a year earlier.

The company operates the Duketon gold project 130km north of Laverton, and has a 30 per cent stake in Tropicana 330km north-east of Kalgoorlie-Boulder.

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Regis said it churned out 220,632 ounces in the half-year at an all-in-sustaining cost of $2119/oz, with sales revenue increasing to $550m from 211,010oz sold at an average price of $2607/oz.

Although it sold more gold during the half-year to December 31, 2022 — 227,000oz — it actually earned less revenue — $536m.

The company said underlying earnings before interest, tax, depreciation and amortisation was $167m, compared with $197m during the same period a year earlier, with an underlying EBITDA margin of 30 per cent, compared with 37 per cent in the half year to December 31, 2022.

Cash flows from operating activities were $126m, with Regis having cash and bullion of $155m on hand at December 31 after the hedge book close-out payment, and a net debt position of $145m.

Managing director Jim Beyer said he believed the latest half-year would be remembered as the period when Regis had positioned itself well for the future.

“We have had key assets, Tropicana’s Havana Cutback and Duketon’s Garden Well South Underground, move into commercial production and start delivering on their value promise, and significantly, the company was finally able to break free of its long-running hedge book,” he said.

“With gold production and AISC on guidance, a simple analysis of our underlying financial performance of the first half of FY24 clearly illustrates the substantial cash flow capacity of our business when unhedged.

“On future growth, our large McPhillamys project progresses, with the definitive feasibility study due for completion in the coming months.

“Whilst frustrated with the pace of the Section 10 assessment, which is still in its final evaluation, we remain optimistic of a positive outcome.

“Meanwhile at Duketon we are excited to see our potential underground projects of Rosemont stage three and Garden Well Main move into the final evaluation stages.”

Regis said production guidance for the full-year remained unchanged at 415,000oz-455,000oz at an AISC of $1995/oz-$2315/oz.

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