Regis Re­sources

Regis Re­sources capped off FY18 with record pro­duc­tion and cash flow at its Duke­ton project. Mov­ing into FY19, the good news is set to con­tinue with an ex­pan­sion un­der­way at Rose­mont and DFS work ad­vanc­ing at McPhillamys.

The Australian Mining Review - - CONTENTS - EL­IZ­A­BETH FABRI

WA-BASED gold miner Regis Re­sources has a busy year ahead, with plenty of up­side across its port­fo­lio af­ter a record June quar­ter.

For the fi­nal three months of FY18, the miner pro­duced 92,008 ounces of gold, bring­ing its an­nual pro­duc­tion up to 361,373oz at an all-in-sus­tain­ing cost (AISC) of $901/oz.

Record quar­ter-end cash and bul­lion hold­ings of $208.8 mil­lion were also a plus, and “tes­ta­ment to the qual­ity” of the Duke­ton op­er­a­tions, ac­cord­ing to Regis Re­sources ex­ec­u­tive chair­man Mark Clark.

Duke­ton, the miner’s flag­ship op­er­a­tion, en­tered pro­duc­tion in 2010 fol­low­ing the con­struc­tion of the Moolart Well gold mine.

In 2012, Gar­den Well was added to the mix, which has its own stand­alone mill, and a year later, the Rose­mont hy­brid gold project was com­mis­sioned, which in­cludes a crush­ing and milling cir­cuit, with ore slurry pumped to Gar­den Well’s pro­cess­ing fa­cil­ity.

In FY18, op­er­a­tional ex­cel­lence con­tin­ued across the three mines; at Moolart Well, gold pro­duc­tion was up 9 per cent in the June quar­ter as a re­sult of an in­crease in through­put to a record an­nu­alised rate of 3.5 mil­lion tonnes per an­num (mtpa); 11 per cent up from the prior quar­ter.

Mov­ing into FY19, the com­pany’s guid­ance sig­nalled an­other good year for Regis.

At the end of July, the miner up­dated the mar­ket, an­nounc­ing FY19 pro­duc­tion guid­ance of between 340,000oz and 370,000oz at an AISC of between $985-$1055/oz.

While pro­duc­tion guid­ance was higher than FY18 fig­ures of between 335,000oz and 365,000oz, warn­ing bells were trig­gered among the in­vest­ment com­mu­nity due to the slight rise in AISC guid­ance.

On 31 July, Regis shares dropped 12 per cent on the ASX; a sur­prise even its ex­ec­u­tive chair­man Mr Clark didn’t see com­ing.

“I didn’t imag­ine that [AISC] was go­ing to be per­ceived as a big neg­a­tive,” Mr Clark told an­a­lysts in a con­fer­ence call.

“Our costs are fore­cast to be marginally higher at Duke­ton this year because we’re crack­ing the top of some high-grade starter de­posits.

“And I’ll just re­mind peo­ple for the last two years we have given cost guid­ance, and then our ac­tual costs have been be­low the lower end of that guid­ance.”

Mr Clark said in­vestors could ex­pect “more of the same” from Duke­ton this fi­nan­cial year.

“Cer­tainly, from our per­spec­tive, it’s look­ing like an­other re­ally strong, ro­bust, high cash gen­er­a­tion type year that we’re fac­ing at Duke­ton,” he said.

Rose­mont Un­der­ground

One of the big­gest growth driv­ers in the near-term will be an ex­pan­sion at the Rose­mont op­er­a­tion.

In early August, Regis gave the green light for con­struc­tion to be­gin on an un­der­ground mine, di­rectly be­low the ex­ist­ing open pit.

Mr Clark said the de­ci­sion to ap­prove the first un­der­ground mine was a “very ex­cit­ing step for Regis”.

“We be­lieve that the ap­proved Rose­mont un­der­ground op­er­a­tion is a ro­bust busi­ness in its own right; but just as im­por­tantly will see the in­fra­struc­ture in place to grow that mine through ex­plo­ration from an estab­lished un­der­ground foot­print,” he said.

“This growth op­por­tu­nity will be tar­geted both lat­er­ally between the two min­ing zones and at depth and along strike.

“There is also a very strong op­por­tu­nity to repli­cate this de­vel­op­ment path at Gar­den Well in the near term and then at other Duke­ton satel­lite pits in due course.”

The com­bined open pit and un­der­ground mine at Rose­mont is sched­uled to de­liver 10.3 mil­lion tonnes of ore at 1.72 grams per tonne for 570,000oz over a cur­rent five year mine life.

The un­der­ground com­po­nent has a Min­eral Re­source Es­ti­mate (MRE) of 1.4mt at 5.1 g/t gold for 230,000oz of gold at a 2.0g/t gold cut-off grade.

Mr Clark said de­vel­op­ment work would be­gin in the cur­rent quar­ter with per­mit­ting, as well as the or­der of long lead cap­i­tal items and an un­der­ground min­ing con­tract ten­der­ing process.

In the March quar­ter of next year, por­tal de­vel­op­ment in the south­ern end of Rose­mont Main will com­mence with pro­cess­ing to be­gin in the De­cem­ber 2019 quar­ter.

Mr Clark said once the un­der­ground mine was at full min­ing ca­pac­ity, the com­bined op­er­a­tion would pro­duce at a run rate of between 120,000 and 130,000ozpa; an es­ti­mated 45,000ozpa up­lift on pro­duc­tion.

Ad­vanc­ing McPhillamys

Mean­while, Regis was also work­ing on plans to push for­ward its McPhillamys project in Cen­tral NSW.

The project is con­sid­ered one of Aus­tralia’s larger un­de­vel­oped open pit op­por­tu­ni­ties, with a gold re­serve of 2.03moz.

“It’s a sig­nif­i­cant project for us and we’re ex­pe­dit­ing work to bring this de­posit into pro­duc­tion as close to the start-up time at McPhillamys as pos­si­ble.”

A Pre-Fea­si­bil­ity Study was com­pleted in 2017, which de­ter­mined a planned 7 mil­lion tonne per an­num min­ing and pro­cess­ing op­er­a­tion that would pro­duce an av­er­age of 192,000ozpa over a 10 year life.

On 26 July, a Pre­lim­i­nary En­vi­ron­men­tal As­sess­ment (PEA) was sub­mit­ted to the NSW Depart­ment of Plan­ning and En­vi­ron­ment.

Regis said the PEA was the lead doc­u­ment in the de­vel­op­ment ap­pli­ca­tion phase, and the cat­a­lyst for the Gov­ern­ment to pro­vide the Sec­re­tary’s En­vi­ron­men­tal As­sess­ment Re­quire­ments (SEARS) for the project.

SEARS would then al­low for the En­vi­ron­men­tal Im­pact State­ment (EIS) to be ap­pro­pri­ately fo­cused to en­able reg­u­la­tory as­sess­ment of the project.

Over the next few months – once the EIS is com­plete – this will then al­low for fi­nal el­e­ments of a De­fin­i­tive Fea­si­bil­ity Study (DFS) to be signed off.

“We would hope to have EIS and DFS fin­ished at the end of this cal­en­dar year, and then sub­ject to the re­ceipt of the fi­nal per­mit­ting, we would can then move into the de­vel­op­ment phase hope­fully in the first quar­ter of cal­en­dar year 2019,” Mr Clark said.

“We’ve al­ways said it’s between a 10 and 12 month con­struc­tion pe­riod.”

This would mean pro­duc­tion could, in the­ory, be­gin as early as FY20.

In ad­di­tion, Regis was ex­am­in­ing Dis­cov­ery Ridge, 32km south west of McPhillamys, as a po­ten­tial satel­lite mine.

The Dis­cov­ery Ridge de­posit was ac­quired last year as part of the Blayney Gold pur­chase.

Mr Clark said the project rep­re­sented “an ex­cel­lent growth op­tion for the com­pany”.

“It has a re­source of just over 500,000oz,” he said.

“We’ve had very strong re­sults in­clud­ing 35 me­tres at 2.54g/t gold and 50.65m at 2.8g/t.”

Mr Clark said in the cur­rent quar­ter the team would be un­der­tak­ing a 4000m di­a­mond drilling pro­gram to test the down plunge ex­tent of the east­ern lode of the de­posit.

“We ex­pect to up­date the re­source and quote a maiden re­serve at Dis­cov­ery Ridge later in the cur­rent quar­ter, and we’re tar­get­ing a sub­stan­tial satel­lite project with min­i­mal cap­i­tal, higher grade and lower strip than the early years of McPhillamys project.

“It’s a sig­nif­i­cant project for us and we’re ex­pe­dit­ing work to bring this de­posit into pro­duc­tion as close to the start-up time at McPhillamys as pos­si­ble.”

“We be­lieve that the ap­proved Rose­mont un­der­ground op­er­a­tion is a ro­bust busi­ness in its own right; but just as im­por­tantly, will see the in­fra­struc­ture in place to grow that mine through ex­plo­ration from an estab­lished un­der­ground foot­print.”

Im­age: Chris­tine Dar­byshire.

Im­age: Regis Re­sources.

Regis Re­sources is sched­uled to pro­duce between 340,000 and 370,000 ounces of gold in FY19.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.