Why is the Regis Resources (ASX:RRL) share price frozen today?

Key points

• Regis Resources has placed its shares in a trading halt pending an announcement in relation to the Rosemont gold mine
• A statement is expected to be made on or before Tuesday 25 January
• The company’s shares have accelerated in a month as the price of gold rises

The Regis Resources Limited (ASX: RRL) share price won’t be going anywhere on Friday. This comes as the gold miner requested its shares be placed in a trading halt before market open.

As such, Regis shares are frozen at $2.10 apiece. It’s worth noting the company’s shares have gained more than 13% in value in the past month.

Why is the Regis Resources share price halted?

Prior to the market open, the company requested the Regis Resources share price be halted while it prepares an announcement.

The company says it is planning to release a statement on or before Tuesday 25 January.

This is in regards to its FY22 guidance after a geotechnical incident occurred at the company’s Rosemont open pit in Western Australia.

What’s the latest?

At this stage, details remain unknown about what exactly occurred at the company’s underground gold mine.

Located in Bandya, WA, Rosemont and its associated surface deposits are mined using conventional open-pit mining truck and shovel methods.

Commercial production commenced in June 2020, with 721,000 tonnes of ore mined and 8,000 lineal metres of development achieved during the year, according to the company’s results for FY 2021.

Deep drilling continued at Rosemont to explore the high-grade shoots which extend at depth beneath existing underground infrastructure.

The company said about 24,000 metres of diamond drilling was completed to test down-plunge extensions of high-grade gold mineralisation. It also announced an updated mineral resource of 2 million tonnes at 5.2g/t Au for 340,000 ounces.

Interestingly, the company had this to say in its report for the quarter ended September 2021.

“Lower mill feed grades were largely a result of the treatment of low-grade stockpiles while pits were rescheduled as a result of unplanned geotechnical issues in Rosemont North and Main pits.

“These issues resulted in delays while adequate controls were put in place to manage the risk and allow access to ore. This work has now been largely completed and while it is not expected to be an ongoing issue, it is being carefully monitored as these pits are completed as planned during FY22.”

Earlier this week, the company’s non-executive director Russell Barwick resigned from the board with immediate effect. While citing personal reasons, Regis shares wobbled in the days following.

About the Regis Resources share price

Since this time last year, Regis Resources shares have lost more than 40% in value. In 2022 alone, the company’s shares are up by 7% after the price of gold sharply rose yesterday.

Based on valuation grounds, Regis has a market capitalisation of roughly $1.59 billion, with approximately 754.78 million shares on issue.

The post Why is the Regis Resources (ASX:RRL) share price frozen today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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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