Page 76 - pd287-Oct20-mag-web_Neat

DIGGeRs & DeALeRs

Greenfields look for Regis

Which would you rather; iron ore or gold? It is a tough question for Jim Beyer to answer.

uring his tenure as Mt Gibson do that for so long,” Beyer said.
DLtd chief executive from 2011- “We spent $20 million last year
2018, Beyer experienced plenty buying all the Duketon ground
of lean years in the iron ore sector so now we control 92-93% of the
as spot prices fell from their record Duketon greenstone belt.”
highs but those days appear a dis- Just holding prospective tenure
tant memory now that prices are won’t guarantee success and Regis
touching $US120/t once again. Al- will beef up its exploration capacity
though the iron ore sector is behind at what is an exciting time for the
him, Beyer still finds himself part of company, according to Beyer.
an equally thriving industry as man- He said nothing excites explora-
aging director of gold producer Re- tion geologists more than doing
gis Resources Ltd. His approach to genuine greenfields programmes
both is the same; don’t get ahead of and then having the ability to follow
yourself. up targets with the requisite budget.
“Whichever sector you’re in, I While Regis can offer that, there
think you have to be careful not to are other opportunities on the hori-
assume that the sector is going to zon for people to look forward to.
run on $2,7000/oz gold or $US120/t “We are going underground mine
iron ore forever. It is about getting running [Rosemont: 1mt @ 4 g/t for
the balance right between being too 140,000oz gold] and hopefully an-
conservative or too optimistic, but other underground [Garden Well:
the share market will make a call 5m @ 5 g/t, 3.8m @ 5.8 g/t, 5.8m
on that as well,” Beyer told Paydirt @ 7 g/t, 16m @ 4.9 g/t and 9m @
recently. Jim Beyer 4.2 g/t] approved later this year, so
“Whatever you are doing now you there’s plenty of exciting stuff and
have to make sure that you are ready for what company in a position where you aren’t at risk Regis is one those companies starting new
is going to happen three or five years from if the gold price comes off. It is a balance of mines,” Beyer said.
now when things soften. Gold goes in cycles not letting the opportunities of a higher gold One mine that the company would like to
and a lot is going to depend on how the eco- price go by, but also being careful.” see the start of is McPhillamys in New South
nomic fallout from COVID is managed.” Beyer’s measured view of the gold sec- Wales.
In a time of uncertainty, Regis’ even-keeled tor comes as Regis embarks on a more ex- The 2 moz McPhillamys gold project has
approach to growth should go some way to pansive programme of greenfields activity in been a long-held asset in Regis’ portfolio and
appeasing shareholders who consistently Western Australia’s Duketon greenstone belt. a decision on its future is nearing.
benefit from the company’s sustained perfor- Traditionally, Regis has been focused on A PFS on McPhillamys highlighted the po-
mance. reserve replenishment year-on-year to keep tential for a 10-year play producing 192,000oz
FY2020 saw the company deliver record the hungry 10 mtpa Duketon milling capacity gold @ 1.05 g/t, while the nearby Discovery
NPAT of $200 million, EBITDA of $394 mil- satisfied and while there is still some 43mt @ Ridge project is also shaping nicely for Regis.
lion, $343 million in cash flow from opera- 1.1 g/t gold for 1.6 moz in reserve at Duketon, A maiden reserve at Discovery Ridge –
tions, while a fully franked dividend of 16c/ the company found it challenging to replace 10mt @ 1.2 g/t gold for 390,000oz resource
share plus cash and bullion (no debt) of $209 depleting reserves in FY2020. – and PFS is being targeted for release in the
million were among the highlights during a pe- Therefore, the recent acquisition of the coming year.
riod where group production totalled 352,042/ 5.8mt @ 1.6 g/t for 290,000oz Ben Hur gold In the meantime, a development applica-
oz gold at AISC $1,246/oz. deposit and wider tenement package from tion (DA) for McPhillamys has been submitted
At the time of print Regis was trading at Stone Resources Australia Ltd gives Regis by Regis to the NSW Government, with re-
$5.20/share and had a market cap of $2.64 more potential to add further life to the Duke- sponses to submissions nearing completion.
billion. ton operations. Outcomes of the DA will enable Regis to
“Our shareholders like that we pay a yield. Regis has guided gold production of incorporate updated PFS numbers in a DFS,
After taking into account franking credits, we 355,000-380,000oz at AISC of $1,230-1,300/ which Beyer hopes to get started on next
have a yield of over 4%, which is pretty unusu- oz from Duketon in FY2021, where $35 mil- year.
al in our game. Our growth potential and yield lion will be spent on exploration. “McPhillamys is a great project with rela-
are things that differentiate us,” Beyer said. A large chunk – $25 million – will be dedi- tively low AISC of $1,100/oz or thereabouts.
“We know that we have some sharehold- cated to greenfields exploration across the It is going to be great for the local economy.
ers that like that and we have some others Duketon greenstone belt of which Regis It is a good area around Cadia, Bathurst,
that like to focus solely on growth for growth’s owns nearly all available ground. Orange. Furthermore, coming out of COVID
sake and that is ok, but we need to be careful. “Regis’ history has been spending the it is a great private project. All the states are
You can do anything when gold is $2,700/oz money on resource/reserve conversion and looking at how to bring wealth back into the
but you need to make sure that in five years less on greenfields because they had a pretty economy and spending up on large projects
you are still in a position or you can put the good portfolio of resources, but you can only is one of the ways to employ lots of people

Page 76 OCTOBeR 2020 aUSTRaLIa’S PaYDIRT