Regis Resources (ASX:RRL) which has been plagued by the severe rainfall in Australia earlier this year, has announced an updated production guidance for its financial year 2015 (which starts in calendar Q3 2014). The total expected production for the year is 305-355,000 ounces of gold at a cash cost of $835-915. The mid-point of the guidance would be a production of 330,000 ounces of gold at a cost of $875/oz.
Assuming a sustaining capex and exploration cost of $50M per year, an USD/AUD exchange rate of 1.07 and including the royalty payments, we think Regis should be able to produce at an all-in sustaining cash cost of approximately $1000/oz going forward, and this AISC should be trending downward towards FY 2016 when all the issues of the heavy rainfall will have been digested.
As Regis Resources is a dividend payer, investors will be keen to see what the dividend for FY 2014 (which ends at the end of this quarter) will be. There’s no doubt last year’s dividend of A$0.15/share will not be repeated, and it will be interesting to see which decision the Regis management will take.
> Click here to read the press release
Disclosure: The author holds no position in Regis Resources. Please see our disclaimer for current positions.
