Regis Resources share price loses its shine despite ‘record gold production’

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.

The Regis Resources Ltd (ASX: RRL) share price is heading south on Tuesday morning following the company’s June quarter results.

At market open, the gold miner’s shares kicked off at $1.60 apiece, but have since fallen wayside to $1.565 a share, down 2.19%.

Regis Resources share price stutters despite record result

Here are some of the key takeaways that Regis Resources highlighted for the three months ending 30 June 2022.

  • Record group gold production of 123.9koz in the June 2022 quarter, up from 103.1koz in the March quarter
  • All-in sustaining cost (AISC) of $1,591/oz for the June 2022 quarter compared to $1,574/oz in the March quarter 2022
  • Record full-year gold production of 437.3koz at an AISC of $1,556/oz
  • Annual gold production within FY22 guidance of 420koz-475koz

What else happened in the period for Regis Resources?

The strong operating result translated into an improved group cash position for the quarter.

Gold sales for the three months stood at 145.2koz at an average price of $2,447/oz for sale receipts of $355 million.

Regis Resources generated total operating cash flow of $134 million, of which $83 million came from Duketon and $51 million from Tropicana. This is well up from a group total of $55 million recorded in the March quarter.

Capital expenditure for the June quarter increased to $67 million from $59 million in the prior period. Expenditure for Exploration and McPhillamys was $16 million.

As at June 30, the company had cash and bullion of $231.3 million, up from the $167.1 million at the end of March 2022.

What did management say?

Regis Resources managing director Jim Beyer touched on the company’s performance, saying:

Delivering a record quarter and record year of gold production is a very pleasing result. The Regis team has overcome a number of challenges throughout FY22 and to deliver gold production within guidance is a testament to their commitment and capability.

With the plant modifications at Duketon complete, resource models performing to expectation and Garden Well South underground coming online, Regis is well positioned to deliver a strong FY23.

What’s next for Regis Resources?

Looking at the near term, Regis Resources provided its guidance and outlook for FY23.

Group production is estimated to come in between 450koz-500koz at an ASIC in the range of $1,525-$1,625/oz.

Key drivers for the increase in FY23 gold production are Garden Well South underground coming online, access to higher grade ore at Havana, and a full year of production through the recently modified mill at Garden Well.

Growth capital in FY23 is projected to come in around $145-$155 million. This will be used for funding open pit stripping at Havana and Ben Hur along with underground development at Rosemont and Garden Well.

Regis Resources expects to continue developing potential options to target gold production of 500koz per year by FY25.

Regis Resources share price summary

In the last 12 months, the Regis Resources share price has tumbled by almost 40%.

Year to date, the company’s shares are down 20%.

Based on today’s price, Regis Resources commands a market capitalisation of roughly $1.17 billion.

The post Regis Resources share price loses its shine despite ‘record gold production’ 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 Scott Phillips.

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