Regis Resources Ltd

[audience chuckles] Sorry, in-joke. Not very good one. Okay. Look, thanks very much for the opportunity to talk through Regis. There’s a few areas that I want to focus on today in this presentation just to give people some coverage on some of the items that I think are maybe not misconceptions, but just pieces where they don’t quite see where the value has been coming out of Regis and also just demonstrating how far we’ve come in the last two years.

For those that aren’t aware, we have producing assets in Western Australia. The Duketon asset, which we run and operate. This year’s guidance 240,000 to 270,000 ounces. Reserves of 1.4 million. Tropicana, we own a 30% share with AngloGold, and our share of that production is 120,000 to 130,000 ounces this year. And we also have a very large growth project sitting over in McPhillamys. 1.9 million ounce deposit sitting at just over a gram and we’re in the process of getting that reviewed and fully permitted.

So the highlights for FY26 and how did we go? Well, record statutory net profit after tax, $515 million, up 332 from the prior year. Record cash flows. EBITDA of just under $1 billion with a margin of 57%, and that was off production of 379,000 ounces at an all-in sustaining cost US$2,120 an ounce. You can see our sales revenue, but importantly, we continued to build on our dividend payment. We paid a fully franked dividend for the year of 35 cents a share. That’s Aussie and which represented a 39% payout of our free cash flow and a 6.5% yield.

And this is where we see there’s some key factors of Regis that we would like people to understand. Our cash flow per share is second highest in our peer group in Western Australia. And what does that mean? Well, these are the dividends. We’ve long been a dividend payer. We had to stop for a few years. We were burdened with a remnant hedge book, a legacy hedge book that stopped us for a while, but we’re back paying again. First five-cent dividends were paid in the second half of financial ’25, and we stepped it up to 35 cents in FY26, which means that we’ve paid over 216 million US in the last 18 months alone. And that’s off a total of 850 million since we started production back in 2012. That’s 850 million Aussie.

Now, the important thing here is looking at the per share dividend yield, including franking credits. Regis is a standout at 6.5% on the yield. So our plan is delivering. Our cash flows are delivering, our production are delivering, and in return, we deliver that to our shareholders today, now.

How’s it looked like for the last couple of years? Back in June 24, we were net minus five million. We had about 300 million in debt and obviously about the same in cash. And you jump forward 24 months to June 26th, and unfortunately, because of the calcs, we left these in Aussie dollars for you. But nearly 1.2 billion in cash and bullion at the end of June 26th. And somebody asked me today, “Do we hold a lot of bullion and carry it?” No, we don’t. It’s just the way that we describe it to ensure that the accountants and the regulators are all happy that we’re being fully disclosed. But any bullion that we do hold is usually converted to cash within days, if not hours.

And so we built up nearly 1.2 billion in cash, and that’s after also repaying or back paying a $38 million dividend in September this time last year and another $114 million in dividends at the beginning of this year. And obviously, we’ve just declared another one of 20 cents a share for the second half. So the business is performing exceptionally well, positioned perfectly for the strengthening in the gold price that we’ve seen and delivering cash flows and very strong cash flows, and we are now returning those to our shareholders while at the same time keeping ourselves positioned for internal and external or organic and inorganic growth.

Our guidance this year, slightly higher than last year on production, 360,000 to 400,000 ounces for the group. Our all-in sustaining costs in US, 2,153 to $2,441. And we see a slight increase in our all-in sustaining cost this year, and I’ll explain why. We’re putting some opportunistic ounces through one of our mills. We see the real opportunity to make some excellent money there in this price environment. Our growth capital, similar to last year, $180 million to $194 million while we continue to develop underground and we’re bringing online some new open pits and the underground development at Tropicana. 58 to 65 million for exploration, and McPhillamys is 22 to 25.

And you can see the proportion of our production over on the stacked bar chart on the right. Of note, we are expecting a slight bias in production for the second half. So the first half will be a little bit softer and the second half, not substantially, but there will be a slight leaning in our production to the second half. You’ll also see that the growth capital is skewed to the first half. So it’s up a little higher in the first half as we bring on a project we call Buckwell. We’re doing the pre-stripping for that at the moment. And we’ll see that starting to wind down a bit in the second half. So certainly a stronger payments there. And we’ve got a one-off tax payment catch up that we’ve been letting the market know about that’s coming up in the December quarter. But otherwise, the year is slightly better than last year and continues on our growth pattern. We see that it’s going to be an exceptional performance financially with a sustaining gold price.

And I want to spend a little bit of time talking about our operating model and just, I guess, quelling a couple of questions. No doubt, most of you would be aware, and we saw the Genesis presentation earlier with the merger with Volt. We had an earlier proposal which Genesis beat, and we weren’t prepared to increase our bid, so we were happy to walk away from that. But through that conversation, we saw some commentary and maybe a lack of recognition of some of the longer-term and ongoing value at Duketon. So I just want to talk a little bit about our operating value model there and also talk about some of the other growth value areas in our business.

So the diagram on the left is the Duketon Greenstone Belt, and we have three mills there totaling around about 10 million tons per annum. But our key rhythm there is to introduce and discover low-cost ounces, put them into the system. And you can see they’re coming in about $55 an ounce. We generate strong cash flow, retaining some and pushing a chunk out to our shareholders. As mentioned before, $216 million paid out in dividends in the last 18 months. And then we also retain money, retain that for growth and continue to build. That is our value creation model, and that is what we are delivering now.

An example of the opportunistic ounces that we’re also including in our production is sitting in this. This is around the first mill that we built called Mulart Well. It’s got about a 2.5 million ton oxide capacity, and it was heading into care and maintenance. And we looked at some of the old pits, we reinterpreted the geology, and we realized that while the answers were a little bit more expensive than our existing production in the southern area of our operations, we saw a very clear and a very real opportunity to add some value. We’re going to mine from there. As a result, we’ll mine 223,000 ounces over the next five and a half years. At a gold price of US$3,880 an ounce, that’s the gold price, that’s not the cost, we get a pre-tax NPV of 193 million and a return on our capital of 127%. And obviously, the gold price is a little better than that.

So this is delivering genuine returns for us, an excellent opportunity and some very good work, I would say, by our geos as they went and reinterpreted some of the old ore bodies that we thought we’d mined past. Bit of a theme that you’ll see that our exploration geos and our mine geos are really starting to add some value. But this is a great example of something that we were getting ready to walk away from, and we saw a real opportunity.

But this is what’s been going on at Duketon. When people think that the mine, we have some discussions that’s not far away from finishing up. So if I look at the reserves that the mine had back in 2021, we have 1.4 million ounces sitting in reserves. Now you jump forward five years, we have 1.389. So nearly 1.4 million ounces still sitting in reserves, and during that time, we’ve mined 1.3. We have basically mined and replaced nearly all of the reserves that we had four, five years ago. And those ounces have been added to our portfolio at an average cost of US$55 an ounce. You want high-value ounces, discover them, and add them in reserves. It’s probably the best way you’ll see of adding value, well before acquisition.

And half of those ounces, by the way, have come from underground. These aren’t ounces that have come in before because the gold price has come up. About half of those new ounces that we added in came from our underground operations. About a quarter came from a higher gold price, and about a quarter came from discoveries that we added in.

Now I want to have a look a little bit more at what we’re seeing in the underground, and this is where a lot of those new ounces came from. Back in 2019, when we first went underground, we had 123,000 ounces in reserves. Now jump forward about six years, six or seven years, we’ve got 714 million ounces in reserves across three mines. And during that time, we’ve mined 475,000 ounces. So we’ve actually mined more than three times what we originally had in our reserves, and we’ve actually got something like probably four times, four or five times what we currently have. The underground, we just keep on adding to them and increasing their scale.

And to give further evidence of that, while they’re not particularly clear, these two diagrams here, the top one is Rosemont, where we first went underground, and you can see the colored areas and the different areas in the yellow squares. And I’ll just pick one out, for example. Sitting in the far right-hand side, so sitting up the top here, there’s 220,000 ounces, 219,000 ounces we think we’ll pull out of that area. We’ve already extracted 200, and there’s about 20,000 left. So we’ve pretty well worked that one pretty hard. But you keep pushing south, and we’re adding more and more ounces. And over in the yellow box, just over on the left-hand end, you can see there’s 167,000 ounces in reserves there that we haven’t started mining yet, and that’s only the purple area. The blue area around it is sitting in resource, and it’s just sitting in resource ’cause we haven’t got enough drill holes in it. But it’s following the same pattern. And to give us and our investors confidence, we drilled some holes 500 meters further to the south, and we hit gold, we hit exactly the same lithology. This is exactly like Tropicana. It’s going to just keep on going.

So we see that at Rosemont. And then on the bottom, you see at Garden Well, we’ve got our two mines there, Garden Well South and Garden Well Main. We’ve also been drilling there. You can see the Garden Well Main has got 357,000 ounces in reserves, and we’ve barely started mining that. We’ve only just really started commercial production. But we drilled a hole about 500 meters or so down plunge, 10 meters at 2.9. It’s the same ore body. It keeps on going. We see the trend continuing.

Now this is another one that I just wanted to talk on briefly. Bemish South is a 270,000 ounce resource we just recently added into our resource balance. This is four kilometers away from the existing Garden Well mill and sits between two pits that were mined some time ago. It’s a virgin discovery. This was not off the back of some hole that somebody forgot about. We had a hole in the area that had structural information on it. Our exploration geos now understand the structural conditions in the area, went and identified, re-logged the core, and they found this hole. And we’re still drilling it, we’re still finding more to add to it. But it’s a real example of how our experience now is starting to provide real answers and, I think, will continue to add to ounces at that $55. And this is just a graphic of the pipeline that we’re running. Plenty of prospects.

Tropicana is a very similar story. The underground, back when it first went underground, 317,000 ounces sitting in reserves. Here we are about seven years later. We’ve got 851,000 ounces sitting in reserves underground, and we’ve mined out 800. So what started off as a 320,000 ounce underground is now 1.6. Half of it mined, half of it still to go. And we keep on adding to it. We’re drilling down plunge. We’ve got some holes that are five or six hundred meters down from the nearest resource modeling. Same lithology, thickness, grade, it’s there. These underground mines continue.

Now one other element to cover off on is our McPhillamys project. 1.9 million ounces of reserves, an average of 187,000 ounces or 190,000 ounces a year. Average all-in sustaining cost of around about US$1,237 an ounce. This will be an absolute money machine when we get it going. We’ve had some problems with a Section Ten or a very unusual declaration of heritage protection. We’re challenging that in the court. But what we have done is we’ve developed an alternative way of disposing of the tails. We’re gonna dry them out in filter presses and co-mingle them in the waste rock dump. The state has supported us on this approach, and we’ve got a very engaged government that’s working with us to get this permitted.

We think that this will be ready, permitted and ready for FID regardless of whether our judicial challenge on the Section Ten on the old tailings dam design, whether that’s successful or not, we have a project. We re-declared 1.9 million ounces. It’s about a billion Aussie to build. So we think we’ll be making FID around about early to mid-calendar ’28, two years to build. This will be in production for ten years next decade. This is where we see our production continuing at our current rates from Juuknan and from Tropicana. And if you’re looking for where the growth comes from, organically, it comes from McPhillamys.

It continues at depth. It’s got some exceptional hundred and... Well, managed to put a picture over it, but it’s 142 meters. We’ve got 59 meters at 2.2 grams sitting underneath the pit. This deposit, the grades actually improve with depth. We’ve got Discovery Ridge about 20 K’s away, 20 kilometers away. That’s 400,000 ounce resource. And across the road 1.5 K’s, we’ve got Kings Plains. There’s a hole there that’s 85 meters at one gram. We’ve got undergrounds that we’re drilling around, very old undergrounds, 100 years old. This is an exceptionally prospective geological area. On the little map there in the middle, you can see there’s Cowal. Cadia’s about 15 K’s away. I’d love to think it would be a Cadia, but it’s gonna be a mini Cadia. We’re gonna have a great deposit, seven million ton per annum plan, an open pit that’ll run for nearly ten years. It’ll go underground. This will be an asset that just keeps on giving well, well into the end of next decade.

So Regis – The Golden Opportunity. We’ve got strong free cash flow today. You can see it in our buildup. You can see it in the way that we’re a sector-leading dividend payer. I’ve told you we’ve already paid 612 millions in divvies. We’ve got a 6.5% yield at the moment, leading in our sector in Australia. You can see that we’re delivering significant value through low incremental discovery. We’re finding it on the ground that we hold. Our geologists and our exploration geologists are really getting to understand the geology now over the last four or five years. And really starting to kick some goals. We’ve got a clean, debt-free balance sheet. We’ve got established infrastructure. We’re exploiting those opportunistic ounces when the price is up. We can squeeze some of the lower grade in. And clearly, with the McPhillamys project, we’ve got a clear permitting pathway. We do not require the judicial review to be legally successful. We have an alternative pathway, and it will happen. Okay. So that’s a summary. Thanks, Hayden.

Thanks, Jim. So just on McPhillamys, the pit shape you’ve got at the moment, can you make that bigger, or is anything in depth gonna be underground?

We’re actually looking at that at the moment. We’ve decided to go back and do a little bit more drilling. We do have some space to push out. You can’t really see it in that diagram. The restrictions that we’ve currently got on the Section 10 don’t limit us too much. We can make it a little bit bigger, not double the size. McPhillamys tends to, even though the grade does improve with depth, it does narrow up a bit, lends itself more to underground. I think the bottom of that pit ends up being economic rather than geological. So we might get a few more benches down, but I think what’ll end up happening is it’ll go underground.

Okay, brilliant. We’re out of time, Jim, so thanks very much.

Thanks for the question. Thank you, everybody. [applause]