While the stock markets globally are performing well currently, gold mining stocks have seen impressive gains this year. The sharp rally in the dollar after Trump won the presidential election battered the gold stock market. However, the dollar retreating from four months peak after rate cut by Fed led to a resurge in ASX gold companies. With markets absorbing this dual effect, and gold steadying near $2700 mark, it is time to look for gold companies to invest in.
Regis Resources Limited (ASX: RRL)
Regis Resources Limited (ASX: RRL) reported robust performance for the September 2024 quarter, delivering its third consecutive quarter of cash and bullion growth. Group production totalled 94.5 koz at an all-in sustaining cost (AISC) of $2,495/oz, which includes a non-cash stockpile drawdown cost of $132/oz. gold sales of 79.6 koz generated $296 million at an average realized price of $3,717/oz, and operating cash flow reached $150 million, comprising $79 million from Duketon and $71 million from Tropicana. Cash and bullion holdings grew by $85 million to $380 million, after factoring in capital expenditure of $50 million and $4 million allocated to McPhillamys.
Production centres performed well, with Duketon South producing 57.5 koz at an AISC of $2,650/oz and Tropicana yielding 37.0 koz at an AISC of $2,173/oz. A key milestone this quarter was the Tropicana Joint Venture’s approval of the Havana Underground mine development, which began in this quarter. Underground development at both Garden Well Main and Rosemont Stage 3 also progressed as planned. Despite these strong operational metrics, the company faced a significant challenge with the McPhillamys Project. In a setback, a Section 10 declaration by the Federal government affected the project’s tailings storage facility (TSF) area, rendering it unusable and making the project unviable in its permitted form. Consequently, Regis wrote down $192 million in historic investment and removed 1.89 million ounces from its reserves statement.
Regis remains among the best gold stocks as its underlying business continues to demonstrate substantial cash generation, with the FY25 production and cost guidance reaffirmed. High gold prices, remaining above $4,000/oz, enhance the company’s capacity to grow cash reserves, which strengthens its financial position and strategic flexibility. With a stable asset base, Regis has a clear focus on sustainable, profitable production while driving growth.
Growth strategies include ramping up production across its portfolio, acquiring additional underground assets, and enhancing throughput at the Havana open pit while reducing waste movement from FY25 onward. Additionally, the company plans to initiate an access decline and deliver a feasibility study for further development. Supported by strong financials and consistent revenue, Regis is well-positioned to reinvest in exploration and project expansions, ultimately enhancing shareholder value. While challenges at McPhillamys have led to a strategic adjustment, Regis’s resilient cashflow and operational efficiency across its core assets provide a solid foundation for continued growth and profitability.
Source: Company’s Report
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