{"id":59856,"date":"2012-04-27T11:16:50","date_gmt":"2012-04-27T01:16:50","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2012\/04\/27\/regis-continues-to-deliver\/"},"modified":"2012-04-27T11:16:50","modified_gmt":"2012-04-27T01:16:50","slug":"regis-continues-to-deliver","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2012\/04\/27\/regis-continues-to-deliver\/","title":{"rendered":"Regis Continues To Deliver"},"content":{"rendered":"

\n\t – Regis delivers solid production report
\n\t – Exploration and new projects to boost production in coming years
\n\t – Citi<\/span> has Regis as its preferred Oz gold producer
\n\t – Other broker opinions mixed<\/strong><\/p>\n

\n\tBy Chris Shaw<\/p>\n

\n\tEmerging gold producer Regis Resources ((RRL<\/span>)) delivered a well received quarterly production report yesterday, the highlight being the performance of the Moolart<\/span> Well mine. For the three months Regis produced 26,700 ounces of gold at a cash cost of $519 per ounce.<\/p>\n

\n\tAs Citi<\/span> notes, higher grades and mill recoveries at Moolart<\/span> Well meant solid output at low cost. The performance also highlights the operational potential of the Garden Well and Rosemont projects in the broker's view.<\/p>\n

\n\tThe quarterly production has Regis well placed to meet full year production expectations of 95,000-105,000 ounces, UBS noting costs should also fall below the $540-$590 per ounce range as Garden Well starts up. Commissioning for this project is on schedule for early in September.<\/p>\n

\n\tAs new projects come on stream Regis should enjoy a significant jump in production, as Deutsche Bank notes expectations are for gold output of more than 300,000 ounces per annum in FY13<\/span> and 400,000 ounces in FY14<\/span>.<\/p>\n

\n\tA key to this expected production growth in the view of Goldman Sachs is the ability of management to deliver on operational expectations. Deutsche agrees, suggesting the good track record of management meeting planned production increases offers further share price upside going forward.<\/p>\n

\n\tThe other positive in the view of Deutsche is solid mine life, as Moolart<\/span> Well is currently expected to be a 100,000 ounce per year producer for at least the next seven years and exploration is continuing at both Moolart<\/span> Well and Garden Well and is expected to boost resources and reserves.<\/p>\n

\n\tCiti<\/span> is similarly positive on the exploration potential of Regis, as for Garden Well alone the broker sees scope for further drilling to add more than 10 million tonnes<\/span> per annum of reserves. This would extend the project's mine life to 10 years at a five million tonnes<\/span> per annum mill rate.<\/p>\n

\n\tWhile investors should see some valuation upside from increases in production in coming years there is also scope for dividend payouts, Deutsche suggesting distributions could commence in the second half of FY13<\/span> given Regis at present has around $340 million in cash on its balance sheet.<\/p>\n

\n\tPost the production report brokers have made some changes to their models for Regis, with UBS updating its numbers to account for lower commodity prices and revised foreign exchange assumptions.<\/p>\n

\n\tThe changes see UBS trim its price target to $4.50 from $4.70, while Citi<\/span> has gone the other way and lifted its target to $5.30 from $4.75. The consensus price target for Regis according to the FNArena<\/span> database is $4.55, targets ranging from RBS<\/span> Australia at $3.84 to Citi<\/span> at $5.30.<\/p>\n

\n\tRatings on Regis are currently split at Buy and Hold twice each. Citi<\/span> sees value at current levels and so is on the Buy side, highlighting Regis as its preferred gold stock on the Australian market. Deutsche Bank is similarly positive given the potential for production to continue to increase, while Goldman Sachs, which is not in the database, also rates Regis as a Buy with a price target of $5.10.<\/p>\n

\n\tUBS in contrast rates Regis as Hold on valuation grounds, but acknowledges there is potential valuation upside from increases to production in the medium-term. <\/p>\n

\n\tIn a stronger market today shares in Regis are higher and as at 10.50am the stock was up 4c<\/span> at $4.10. This compares to a range of $2.20 to $4.43 over the past year, the current share price implying upside relative to the consensus price target in the FNArena<\/span> database of a little more than 11.0%.<\/p>\n

\n\t
\n\tFind out why FNArena<\/span> subscribers like the service so much: "Your Feedback (Thank You)<\/a>" – Warning this story contains unashamedly positive feedback on the service provided.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Regis Resources reported solid production in the March quarter and continues to deliver an impressive track record as new projects are developed to boost output.<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[6],"tags":[22],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/59856"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=59856"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/59856\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=59856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=59856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=59856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}