Regis Resources Limited

Thanks, Rachel. And thanks, everybody for joining us on this busy day.

Look, I’d just like to introduce around the table Joining me is Jon Latto, our CFO; Stuart Gula, our COO; and Ben Goldbloom, the Head of IR. Look, so we’ll run through the March 2022 quarter results and then open up for Q&A at the end.

Well, March has certainly been a quarter for us of progress we saw the LTIFR rate reduced to 1, and pleasingly remaining below are pleased to see it reducing, but also seeing it sitting below the WA gold industry average, which is a pleasing result. We also saw a number of improvements at both Duketon and Tropicana that have now been completed, and we’re now preparing for a strong June quarter to finish off the financial year.

At Duketon, the oxygen addition plant modifications have finally been installed and commissioned enabling increased feed of the previously stockpiled high grade, but metallurgically complex Tooheys Well ore. We’ve improved grade control and model reconciliations of Moolart, allowing us to mine the high grade open pit with more confidence.

And finally, we’ve returned to stoping in the high grade Main zone at Rosemont underground. At Tropicana, our material movements continued to total material movements increase with a 30% improvement over the quarter.

And mining of Boston Shaker pit in the quarter was focused on waste stripping – setting up this quarter for improved access to hire ore grade feeds to the mill. So overall, combination of these improvements will see us deliver a lift in performance for the June quarter and meeting our FY 2022 guidance.

For the March quarter, overall, we produced just over 103,000 ounces of gold at an all-in sustaining cost of AUD1,574 an ounce. At Duketon was steady at 75,000 ounces for an all-in cost of AUD1,672 and Tropicana 28,000 ounces at an all-in cost of AUD1,216.

Now, I just want to make some comments here on some of the COVID-related delays and impacts that we did experience and there are a number of different areas. But, look, in the quarter, we completed the installation of the additional oxygen sparging and various process control improvements in Garden Well, and this was great.

But, unfortunately, while it’s now commissioned, these quarters did experience some COVID delays. Some of them were originally scheduled to be completed in the middle of the reporting period that is during February.

But they were completed much later in the quarter in part due to labor and in part due to materials. And further the final element of our oxygen enrichment program has been the high shear reactors and those modifications were delayed until mid-April.

And this project was delayed approximately a month as specialist installation couldn’t enter the state following the delayed border opening from February to March. Now, whilst the impact of these delays on the quarter was disappointing.

We are pleased in modifications and are complete and performing as expected. Also, overall shifts at Duketon during March, now this is during March month not the March quarter, were reduced by approximately 4% due to COVID-related absenteeism.

In most cases, apart from what I mentioned before, and they were delays really because of the special nature of the people that we lost access to but in most cases across our operation, we were able to manage the absenteeism in the short-term, but these things have a build-up in impact. Looking more closely at our operations now, Moolart improved with production of around 20,000 ounces at an all-in sustaining cost of AUD1,499, and the lift was greater ore presentation coming from the Coopers and from the Gloster pits.

The increased grade control and geological modeling as I mentioned earlier has improved the predictability and given us the confidence that we expect further improvements over the current quarter. Garden Well produced 32,000 ounces at an all-in sustaining of AUD1,678, as ore produced from Stage 5 started to increase and we saw that improving.

As I mentioned earlier, the high shear reactor was commissioned in April, and is currently running at the required throughput and recovery rates, which we’re really pleased to see. These plant modifications, as I said, are now complete and we have been increasing the high grade to its well feet.

And we’ll continue to do this now through the quarter and beyond. One thing around the Garden Well, the plant that I wanted to mention was, we had the gold bar outturn experienced the short-term issue, and it’s related to the elution circuit at Garden Well, and this in turn resulted, it was – it meant that there was a delay in being able to extract the final step in the extraction of gold and turning it to gold bar.

And we saw an abnormal build in golden circuit at the end of March. This was to the June of about 9,500 ounces higher than what the GIC was at the beginning of the month.

This didn’t impact on overall recoveries. But it did impact on the timing of gold bar pouring.

The issue was relatively quickly resolved, and the ounces have been stripped in the outturn now and they’ve been stripped during April in addition to the production, normal rate of production and GICs are back to the normal levels. Now the reason that this is noteworthy even though it’s really in the grand scheme of things not a particular consequence to our overall production, it is noteworthy that these answers had an approximate value of AUD25 million that don’t show in the March financials due to the timing.

We, of course, will see them in the June quarter. Look at Rosemont, we produced 23,000 ounces at an all-in cost of AUD1,820 an ounce.

We do note that mining ceased in the Rosemont Main Pit, as previously noted geotechnical issues. Pleasingly, we’ve recommenced stoping from the high grade mine zone in accordance with our plan, and that’ll drive high feed grades to the mill in this quarter.

Turning to Tropicana, we continue to deliver as planned expectations, producing 28,000 ounces of gold, and an all-in sustaining cost of AUD1,216. Mining, they’re largely focused on waste stripping, both of the ongoing prep work at the Havana cutback, but also in Boston Shaker as it prepared for good access to high grade ore.

Boston Shakers in this interesting space now where it’s quite tight down the bottom and rather than being smooth ore, it tends to go in surges. And we saw during the March quarter, a particular focus on waste movement.

And as I said, it’s now shifting to full grade ore production. We will see Boston Shaker pit completing this calendar year.

And we’re currently expecting the last of the ore to be mined early in the likeness September quarter or early in the December quarter. Now, the underground mine continued to produce and perform well with no standout points, which is great.

That’s what we like to see. The Havana cutback is on track to access high grade ore in the second half of the calendar year, so that’s next financial year for us.

And as the proportion of Havana ore feed for the mill increases as we expose more ore. We will be seeing a return to historical production rates of the 450,000 ounces plus per year at 100%.

We remain very excited about this asset, very pleased with it, the way it’s performing, and it continues to grow as a reliable producer and cash engine that we bought it for. On the financials, we sold 76,000 ounces of gold and an average price of AUD2,260 that AUD2,260 is after the impact of our hedges.

This generated a total of AUD55 million in operating cash flow, approximately AUD11 million from Duketon and AUD44 from Tropicana. Now, I would note that all of the hedging does get attributed to for historic reasons that get attributed to the Duketon sales, so there is a skew on that impact.

And it’s one of the reasons why Duketon is low relative to Tropicana. The reduction in the operating cash flow also was relative to the prior quarter was primarily driven by a reduction in the gold sales.

And I noted earlier, the timing issue of the gold pours [ph] at the end of the March quarter, which saw AUD25 million in gold sales effectively the equivalent of sitting in GIC that we couldn’t get out before the end of the quarter. And as I mentioned, that’s all been recovered now and we’ve moved on, but it did impact on the quarter reporting.

Our capital expenditure was reasonably consistent at AUD59 million, largely relating to underground development associated with Rosemont, Garden Well South and the Havana cutback and also some other deferred waste mining costs in our other open pits. Other notable cash movements with AUD30 million invested in exploration at Duketon and Tropicana, and along with McPhillamys project.

And we also obtained a net tax refund of AUD10 million in the quarter. And we’re undertaking some more work to quantify potential additional refunds that are due that maybe do.

All of these movements resulted in cash and gold on hand at the end of the quarter of about AUD167 million. But again, I remind you, this excludes those 9.5 million ounces that got caught up in GIC with the extra AUD25 million.

On growth, our growth projects made good progress during the quarter, Garden Well South, the primary pumping station was commissioned and first of all, which came from development was delivered to the mill. Now, the team is encountering the typical challenges as expect with new startups.

But we are anticipating stoping to commence late in the June quarter. Although, I would note that our guidance, the stope tons are not critical to meeting that guidance, so they don’t sit on that critical path.

But we are still chasing that as an opportunity nonetheless. At Garden Well Main, the potential underground project on the Main pit, we completed the plan additional drilling.

However, we saw the study here was delayed, again, we saw general challenges around access to specialist consultants COVID, and really the labor shortages at the moment having an impact. We’re still the team there is still evaluating the optimum extraction methods.

We do now expect the results of this study later in the June quarter. Now, I’ve got no major news on the McPhillamys, but we do continue to see improvement in the engagement with key departments, which is very encouraging.

And we see that positive progress has been made. At Tropicana, we saw an updated resource and reserves which delivered maiden reserve for the Tropicana underground mine area, which is obviously a new area relative to the Boston Shaker.

And we’re very pleased with that. It’s another step forward in a new additional underground mining area to the Boston Shaker underground, and which also continues to grow, and that whole area is continuing to grow as we put more time and money into the exploration and development of it.

As I said before, each time we look at the Tropicana asset, we see more and more potential to grow the reserve base with each of these main areas still open a pit. With a strong history of reserve replacement we’re looking for this asset to be producing good cash flows for the JV for another 10-years-plus.

Regis will provide an update on our group resource and reserves specifically around Duketon and the consolidated rest of the group in the current leader in this current quarter. Now, the last point today is about, Jon Latto, our CFO who has given notice after 3 years in the role, and will leave later next month.

I’m very pleased to advise that Anthony Rechichi, he has been appointed to the position. Anthony of CFO, Anthony is a Chartered Accountant and has experienced – he is an experienced CFO, who spent 17 years working with the ASX listed companies in the gold sector.

Prior to joining Regis, Anthony was CFO, Wiluna Resources for 5 years and spent more than 10 years with Resolute in senior Finance and Accounting positions, including the last couple of nearly 2 years as GM, Finance. Before moving into commerce, Anthony’s commenced his career with PwC, is a great addition to the Regis team.

Now, back to Jon, I’d just like to take this opportunity on behalf of the board to sincerely thank Jon for his financial leadership of the company over the past 3 years. And, in particular, his focused on improving the financial systems and procedures, and his role in leading the financing of our acquisition in the Tropicana joint venture last year.

Thanks, Jon. Jon will finish with Regis later next month.

And Mr. Tony Bevan has been appointed the Interim CFO, while Anthony will transition into the role by the end of the September quarter.

So wrapping up, as an overall comment on risks, look, I think even more comes out this morning on the risks around COVID, it’s clear the broader general labor shortages and the ongoing COVID-related impacts and enlightened inflationary impacts on our input costs remain a risk to overall performance. But, I don’t think my comments are any surprise and they’re certainly not the first to make that observation.

It is a common ongoing theme across the industry at the moment and something that we are all working hard to manage. On the positive side, we see good progress at our growth projects that Garden Well South, and also our assessment of Garden Well Main as a potential future production source, and pleasingly the huge amount of work has been done at the end of March and very early in April to position Duketon and Tropicana to prepare them for a strong June quarter.

So look, I’ll hold it up there. I’ll hand it back to Rachel, and happy to work on any questions that anybody might have.

Back to you. Thanks, Rachel.

Hey, Jim, Jon, and Ben. Jon was it something I said or something I wrote?

No. No.

It’s okay.

Firstly – okay, good. Tax refund, just remind me what are you digging against all?

And what sort of content there will be?

Sorry, Peter. What do we do?

What did you say?

The tax refund use for this potentially more to come?

Yeah. So we are still working with PwC to quantify what that is.

I think in the last quarter, we said, it’d be somewhere in the region of circa sort of AUD12 million. We expect it to be at least that, in fact, it could be north of that.

But we are continuing to work with PwC on it.

Okay, thanks. Jim, we’ve been discussing this morning, the COVID impacted, just to take it on the call.

Is it site specific in WA? Is it broad-based WA?

Is it gold? Is it lithium?

Is it iron ore? It just seems to be mixed messages we’re hearing out of your peers over the last today in the last few days.

And, I know, you’ve talked through your experience. But how do you see this play out in June quarter?

Mixed messages, what in terms of some people not seeing any impact at all?

Yeah, it looks something then a firefighter [ph] to the deal. Others saying that they’re withdrawing guidance for these quarters.

It’s all too hard. So just that way – just wondering what your perspective is?

Yeah, look, I mean, I’m seeing different messages. But on the same theme, I think, we’re all seeing impacts there either.

In the short-term, certainly in March, as the board – when the board is opened up, we lost a number of people, not necessarily, because of the contact rules in WA. We lost a lot of people, not because they had COVID themselves, but because they were deemed to be close contact.

So it’s a bit like a nuclear sort of reaction, one person gets it, but 10 people around them are deemed as close contacts, which I’d point out in New South Wales, I know, because we’re dealing with some of the coal mines over there just related to water and the like that they didn’t the resources there were deemed a critical industry. And if you were a close contact, you could continue to go to work, as long as you weren’t exhibiting symptoms.

Now, we couldn’t do that, you couldn’t do that in WA. And as a result, during March, we had about 1,000 shifts that were lost across Duketon due to people being either with COVID or more the point being in their room, wondering whether there are close contact and having to isolate.

Now that that sounds like a lot, right, 1,000, now represents about 4% of the shifts that we actually work, but it’s still a lot 1,000 people your mining engineers are short, some – you can always figure out how to cover them in the short term, but these things can have a compounding impact if it continues. And we’re keeping a very close eye on that.

We’re conscious of the fact that the rules for mask wearing and controls are changing later in the week, and the rules for close contacts have shifted. So, I think, the risk is still in there, probably, more around potential for people to possibly catch it rather than be tied up because there are close contact, but we’re watching that closely.

And I think more broadly, there’s a lot of activity going on in the state. There’s a [boom in inverted commas] [ph], a lot of movement of people going on.

And the borders have – up until recently, the borders have been a part of a problem of getting people to relocate. They’re down now, but I think it’s probably safe to say that it wasn’t like dropping the floodgates, people haven’t rushed across here.

Thankfully, people on the East Coast to the stop working in WA probably found other jobs. They weren’t sitting around waiting to come in and take the owner back of working for us.

So there’s a labor availability, there’s – yeah, we had materials became harder to get hold up, we needed the specialized stainless steel for our slamjet installations. And normally, you’d be able to find that pretty easily.

We couldn’t, it took us a few weeks to find it, because there just wasn’t any supply. So we’re seeing, we’ve certainly experienced those impacts during March.

I’m not sure they’re going to go away. Those might take a different form.

Labor is still particularly it’s getting a little bit easier. We saw a 10% kick up in applications as soon as the board has went down, but it’s still in all takes time and there’s risk and there’s demand for good people.

So there’s plenty of challenges around, there’s no doubt, I mean, the risk is there, we’ll do our best to manage them.

Can you get – when you talk about Garden Well Main study and access to consultants. Is that you need like bums on seats in WA?

Or is this desktop work? And is that AUD1 value is that you’re just not getting people, because of what you’re paying?

Or the industry is paying?

Well, is it sort of that pit relates to, there’s a bit of a boom going on, you can’t – once and we all know the story of a couple of decades ago, all the GICs [ph] were driving taxis and now you can’t get them to love no money. It’s the same with consultants, you can’t turn on and off like a tech, you want to use specific consultants that you trust and rely on.

And just because you want them doesn’t mean that they’re necessarily available at the moment on your timeframe. So you’ve just got to – that’s the sort of thing that as well causes delays in some work being done.

Last one, cost. Can you give any more granularity about the cost pressures that you’re facing the diesel consumables, freight [ph] material in…

I mean, diesel is a great one look at how much it’s gone up over the last 3 or 4 months, it’s gone from what was probably circulating at about AUD1 a liter or something and its stop at AUD1.38 or something at the moment, I think. I think, Jon, AUD0.10 a liter movement is the equivalent of about what AUD0.30 or AUD0.10 is equivalent about AUD20 an ounce?

Or…

Now, AUD25 an ounce, Jim.

AUD25 an ounce. So you’ve got diesel price pressures.

And I know that things are the consumables grinding material, I just can’t remember off the top of my head, well, that’s gone up. But I know that that’s increased in cyanides, increased by at least 50%, so there’s a lot of things that are putting pressure on across the industry, it’s not just us, and the pleasing thing for us is that all the modifications that we’ve done, while it was a pretty modest capital.

We’ve actually been able to improve the dissolved oxygen efficiencies in our circuit. And as a result of that, we can now back off on some of these chemicals that we’ve been using for the last 3, 4 months to keep our recoveries up, and we can now back off on those.

So we’re pleased with that. That’s a bonus that we’re seeing from completing the commissioning of the oxygen modifications that we’ve done for oxygen enrichment through the circuit.

Thanks, Jim.

Thanks, Peter.

Yeah, thanks, Rachel. Look, we know it’s a particularly busy day.

People are moving from one of these to the next, I’m sure. So thanks, everybody, for joining us.

Please, if you’ve got any questions, feel free to drop us the line, and then Jon and myself will do our best to answer them. So thanks, everyone, have a good day.

And once again, thanks very much, Jon, good luck for the future.

Thanks, Jim.