I know this is the fifth time I am writing about gold but with the precious metal surging to fresh new multi-year highs I need to stress to readers the enormous opportunity that is being presented to investors.
Western Australian gold miner, Regis Resources (RRL) is expanding its potential, with several projects ready to come on stream in the next few months. The company produced 74,612 ozs in the September quarter from the Duketon field operations. Group cash costs were $850/oz and all in sustaining costs (AISC) were $946/oz.
Regis Resources (RRL) has reached a more reliable level of production, with a better realised price for its gold in the March quarter improving margins and lifting cash flow. Brokers observe the company’s Duketon operations in Western Australia are now more stable and there is potential for exploration to yield reserve extensions and replace depleted mine output.
The outlook for Regis Resources (RRL) has improved markedly, brokers believe, on the back of exploration success and a renewed commitment to follow up on discoveries to extend mine life. The latest results from the three Duketon processing centres imply a sustainable 300,000 ozs per year at an all-in cost of around $1,000/oz.
Credit Suisse notes the revised definitive feasibility study for McPhillamys is due in the first half of FY20 and may reveal improved economics on incorporating the higher-grade satellite, Discovery Ridge.
Morgan Stanley notes costs in the June quarter were 24% ahead of its estimates and FY20 guidance on costs is 17% above estimates. Production beat the broker's estimates slightly. The broker reduces FY19 forecasts for operating earnings (EBITDA) by -6%.
St Barbara ((SBM)) has acquired around 12% of Duketon Mining ((DKM)) through a placement. Duketon Mining controls the portion of the Duketon belt not controlled by Regis Resources. Credit Suisse observes the pair would need a material discovery to support infrastructure investment.