Why ASX gold miner Regis Resources (ASX:RRL) share price is moving higher

The Regis Resources Limited (ASX: RRL) share price is gaining today, up 1.8% in morning trade.

Below we take a look at the ASX gold miner’s third quarter (Q3) activities report for the quarter ending 31 March.

What did Regis report on its quarterly operations?

Regis Resources shares are moving higher after the company reported it had produced 85,748 ounces of gold during the reported quarter. That’s slipped a bit from the 91,411 ounces produced in Q2.

Regis sold 67,383 ounces of gold during this period for an average price of $2,014 per ounce. Total revenue came in at $135.7 million.

All in sustaining costs (AISC) for Q3 rose slightly to $1,388 per ounce, up from $1,317 per ounce the previous quarter. This looks to be primarily driven by higher AISC at its Rosemont mine, of $1,602 per ounce.

The company pointed to a falling gold price for the reduction in its cash flow for the quarter, reporting cash flow from operations of $67.2 million, down from $100.1 million in Q2.

Regis held $202.3 million in cash and bullion as of 31 March. After paying dividends of $16.8 million and $19.5 million in income tax, cash and bullion holdings slipped $17.7 million from the previous quarter.

The ASX gold miner retained its guidance for the full 2021 financial year, forecasting production of 355,000–380,000 ounces of gold at an AISC $1,230–1,300 per ounce.

Commenting on the past quarter results, Regis Resources Managing Director, Jim Beyer said:

[I]t is very satisfying to see the production lift in Rosemont Underground. This high grade ore source is a key element of ensuring our performance to year end is within our guidance ranges.

During the quarter our latest growth project, the Garden Well South underground mine, started with completion of the portal and commencement of decline development. This new mine will be an excellent addition to our production profile…

Post the end of the March quarter our Duketon Operations announced a substantial increase in Mineral Resources and Ore Reserves reported earlier this month…

Finally, the announcement and subsequent progress of the acquisition of a 30% interest in the Tier One Tropicana Gold Mine, is transformational for Regis. We are pleased to note AngloGold Ashanti’s recent waiver of the pre-empt for the deal leaving only Ministerial approval for the transfer of the tenement interests as the remaining condition to ownership.

Regis Resources said its $903 million acquisition of Tropicana will give it a gold mine with a production outlook of 380-430,000 ounces in FY21. The expected mine life is longer than 10 years.

Regis Resources share price snapshot

It’s been a difficult year for Regis Resources shareholders, with the share price down 39% in 12 months. By comparison the S&P/ASX 200 Index (ASX: XJO) is up 31% over that same time.

Year-to-date the Regis Resources share price is down 29%.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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