Regis Resources stock price loses luster despite ‘record gold production’

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

When the market opened, shares of the gold miner started at $1.60 each, but have since fallen to $1.565 per share, down 2.19%.

Regis Resources share price stutters despite record result

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

  • Group record gold production of 123.9 koz in the June quarter 2022, compared to 103.1 koz 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 2022 quarter
  • Record full-year gold production of 437.3 koz at an AISC of $1,556/oz
  • Annual gold production in FY22 forecast from 420 koz to 475 koz

What else happened during the period for Regis Resources?

The strong operating result led to an improvement in the group’s cash position for the quarter.

Gold sales for the three months were 145.2 koz at an average price of $2,447/oz for sales revenue 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 above the group total of $55 million recorded in the March quarter.

Capital expenditures for the June quarter increased to $67 million from $59 million in the prior period. Expenses for exploration and McPhillamys were $16 million.

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

What did management say?

Regis Resources Managing Director Jim Beyer reflected on the company’s performance, saying:

Achieving a record quarter and a record year of gold production is a very satisfying result. The Regis team overcame a number of challenges throughout FY22 and delivering gold production on schedule is a testament to their commitment and capability.

With the Duketon plant modifications complete, resource models performing as expected and the Garden Well South basement commissioned, Regis is well positioned to deliver a strong Fiscal 23.

What’s next for Regis Resources?

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

The production of the group is estimated between 450 koz and 500 koz at an ASIC between $1,525 and $1,625/oz.

The main drivers of the increase in gold production for FY23 are the commissioning of the Garden Well South basement, access to higher grade ore in Havana and a full year of production thanks to the recently modified factory in Garden Well.

Growth capital for FY23 is expected to be approximately $145-155 million. This amount will be used to fund open pit stripping at Havana and Ben Hur as well as underground development at Rosemont and Garden Well.

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

Regis Resources Share Price Summary

Over the past 12 months, Regis Resources’ stock price has fallen almost 40%.

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

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

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