Thank you for standing-by and welcome to the Regis Resources quarterly results conference call. [Operator Instructions]

I would now like to hand the conference over to Mr. Jim Beyer, Managing Director and CEO. Please go ahead.

Thanks, Darcy. Good morning, everyone and thanks for joining us on the Regis Resources September 2023 quarterly update. I'm joined this morning without by our CFO, Anthony Rechichi, who just managed to get out of being stuck in the lift this morning. So I'm grateful if he is here to answer -- to be part of this. Otherwise I'll be on my own. Although having said that, Ben Goldbloom, our Head of Investor Relations is also joining us.

So first off, looking at our key safety aspect and our frequency rate. Our lost time injury frequency rate is well below industry average as reported by [indiscernible] WA with the frequency rate of 0.7. I would make a comment that we are seeing a slight increase in the less serious injuries and I think we see that as a bit of a function of the lifting in skills turnover that we're seeing across the industry, all our personnel turnover, I should say. So we're obviously keeping an eye on that to make sure we don't let that get too far ahead of us.

We're very pleased to start the year with a reliable quarter of gold production and a modest cash build. This is the third consecutive quarter of cash build for the company. And since December -- since the December '22 quarter, our cash and bullion balance has increased by nearly AUD 100 million. Now, we're expecting a modest cash build for the remainder of FY '24 and when the existing hedge book rolls off cash build to accelerate and add more than an additional AUD 170 million a year at current spot price. In fact, it's a little bit more at AUD 3,150. Progress on our growth plans continues with the completion of the Garden Well exploration decline. The drilling program is making good progress and is expected to be finished by the end of December this year, or its first phase. We'll provide an update on the drilling results in the biannual exploration update before the end of this calendar year.

At Tropicana, the joint venture progressed and the Havana underground project to the next phase. Now the Havana underground project has the potential to add 7 years of life in addition to the current underground production or 7 years of additional production to the underground. On the ESG front, we saw more than just safety improvements. So, we commissioned the 9 megawatt solar farm at Duketon South, which is now delivering a direct reduction in power costs and also on our carbon emissions, a key element in this period -- this time now -- besides the safeguard mechanism. At Tropicana, the joint venture has commenced the site works for the 62 megawatt solar, wind and battery facility. And overall for the quarter, we produced just over 111,000 ounces of gold for an all-in sustaining cost of a fraction over AUD 2,100 -- AUD 2,160 an ounce. The September quarter was the first time all of our operating assets were in commercial production and it was pleasing to see them deliver the plan.

Just looking a little bit more closely at our operations. The Duketon Gold production was higher at just over -- than the prior quarter at just over 76,000 ounces for an all-in sustaining in AUD 2,180. And at Tropicana, we were just under 35,000 ounces for an all-in sustaining of AUD 1859. Now it's important to keep in mind that Duketon's AISC includes AUD 227 per ounce of noncash inventory adjustment. Duketon North production was just under 18,000 ounces for an all-in sustaining cost of AUD 1,925. Cash margins have improved at Duketon North as waste movements have decreased as planned. The majority of mining at Duketon North will be completed by December 2023 as we get to the end of the Moolart pits. Some mining will continue at the Gloster pit until the middle of next year, June. And this will represent the end of the current reserves in ground reserves.

Following completion of the open pit, mill feed will be sourced solely from lower grade stockpiles and will continue while they generate cash. Once that ends or we don't deliver that, then we'll put the site on care and maintenance, and we'll await further confirmation of the new deposits that we're working up at the moment, potential new deposits.

At Duketon South, production was nearly 59,000 ounces for an all-in cost of AUD 2,258 an ounce AISC. Underground mining progressed well. Good development rates were maintained, above 3,000 meters for the quarter. In the open pits, mining was at Garden Well, Russell's Find and Ben Hur, and this will continue through the remainder of this financial year.

At Tropicana, we delivered an improved quarter at approximately 35,000 ounces for an AISC of AUD 1,859 an ounce. Now we realized an increase in the AISC over last year, and I think we've already highlighted this or identified this before. But this is due to a shift in the classification as we move into commercial production and the capitalized waste stops being classified as growth capital and moves into AISC. Importantly, this is only a change in the, in inverted commas, accounting classification and the cash margins remained broadly in line quarter-on-quarter. It can be seen by the corresponding material reduction, of course, in the great capital of Tropicana, where spend for the quarter was nominally about AUD 3 million.

Following commercial production in Havana open pit in the June quarter, access to ore has improved and is expected to continue in the current period. Underground ore production was the highest since we acquired our share of ownership in that asset. And debottlenecking activities have had a great impact, and we look forward to further improvement as the year progresses.

So what I'd like to do now is hand over to Anthony to give us a little bit more insight into the financials for the quarter. Thanks, Anthony.

Thanks, Jim. On to the financials for the quarter. We sold just over 106,000 ounces of gold at an average price of AUD 2,560 an ounce, that's Aussie dollars, which does include the effect of hedges. This delivered AUD 273 million of gold sales revenue for the quarter.

Operating cash flows have been solid again. Overall, we generated just under AUD 97 million in operating cash flows. That also includes the hedging with approximately AUD 67 million coming from Duketon and AUD 30 million coming from Tropicana.

I'll now point at Figure 3 in the quarterly report, which outlines the cash flows for the quarter. Cash and bullion closed at AUD 250 million at 30, September. You can see that operating cash flows were AUD 138 million. Partly offsetting this was AUD 41 million in hedge losses, owing to the delivery of a further 30,000 ounces into our hedging program. You can see that over to the right of that waterfall chart at Figure 3. Furthermore, we spent AUD 64 million on CapEx, AUD 17 million on exploration and McPhillamys and corporate and finance costs were AUD 9 million. Regarding our debt, as announced yesterday, the company signed an amendment deed with its lenders to extend the maturity date of the existing AUD 300 million loan facility from 31 May 2024 out to 30 June 2025. The extension forms part of the broader funding strategy for the company's McPhillamys Gold Project.

Following the expected completion of the bankable feasibility study in the March quarter next year, it's likely the existing loan will be incorporated into a new financing package along with operating cash flows of our own to fund the project.

Thank you, and back to you, Jim.

Thanks, Anthony. And it is pleasing to see that within 20 minutes, you're over the trauma of being stuck in the lift. Okay. So coming back to touching on growth again and our near future -- and near-term growth plans at all of our assets. I mentioned before, Garden Well exploration is now -- the decline is now finished, and we're feverishly drilling out what we think will become a long and continuous mineralized system underneath the Garden Well pit. The initial drilling program will be finished at the end of this year and we'll at least be able to provide some progress updates on our biannual exploration report or update, which will be in November, so next month.

At Havana open pit, we see the production hitting its straps and later in FY '25, we'll see total waste movements start to decrease as we break back of the stripping while gold production will remain relatively flat. This will result in an uptick in free cash flow generation from that site, all other things being equal, price of course. At Havana the -- at Havana underground, the project has moved into the next phase, the [ movement ] into the next phase is approved. The initial view is that the Havana underground has the potential to add a new production zone for 7 years on top of the existing underground plans, and we're very excited to see this progress in the project. The Havana deposit is following a very similar maturity curve as its predecessors at Boston Shaker underground and also at Tropicana and really reinforces why the entire asset is one of genuine Tier 1 assets going -- Tier1 assets going around.

The value of the underground continues to grow well beyond the reserves as they were 2.5 years ago, the reserves that they were 2.5 years ago when we bought the thing. And this is -- this ongoing growth that we're seeing in the underground is certainly in line with our views on value at the time. I continue to be really pleased with the fact that we acquired that asset and have it in our portfolio.

At McPhillamys, we await a response on the federal Section 10 application. We remain confident this will be cleared and completion of the DFS is expected to be in the March quarter. Our final investment decision in the following quarter will likely follow the release of this study. Look, you can count on one hand, the number of development projects with the scale of McPhillamys, and we're very excited to own that and have that in our portfolio as well.

On a final note here, I'd just like to thank Stuart Goller, who is leaving us after 4 years. He certainly made some material impacts on our safety and our operations and help manage that through the COVID -- the COVID era, something that I think we've all put to the dark recesses of our minds. And next week, I'm pleased to say that Michael Holmes will be joining us as the new COO. Some of you may know Michael, of course, from his time at OceanaGold.

So when you sum up the Regis investment case, we have existing assets that are demonstrating great cash-generating capacity. We'll see a major cash flow inflection point in 8 months and 2 days with the hedging rolling off, and we'll also see this commencement of the decrease in waste movement drop. Look, the reality is, I said 8 months and 2 days, it could be less as we're examining and testing options to bring forward the end of the hedge book and to [ bake herein ] the benefits earlier, potentially. One of the few growth -- and we also, of course, hold in our portfolio one of the few growth development projects with [indiscernible] McPhillamys. So there's still time to get in while the stock is trading at cheap value, with such a relatively simple -- we feel that Regis with such a relatively simple story, clear production future and cash-generating future that the market will see. And we'll see the -- this outlook reflected in the company's share price very soon.

All right. So what I'd like to do now is hand over to Darcy and we're happy to take on any questions that you may have.

[Operator Instructions] Your first question comes from Andrew Bowler from Macquarie.

Just looking at the commentary for Tropicana, you talk about the open pits delivering more ounces compared to plan. Is that just due to higher rates of mining than anticipated? Or was that a beat in terms of the resource model?

Yes. No, look, I think the context of what we were talking about there is the underground developing is adding ounces and life. We've seen over the last couple of years that Tropicana is being replacing depletion and adding a little bit more. So we're pleased to see that continue. And we're certainly pleased to see the potential with the Havana underground to continue with that by adding in new ounces that are outside of the -- potentially new ounces that we haven't finalized, just in feasibility study, of course. So that's the context of what we're looking at there.

Okay.

Yes. I guess the other thing is we are -- we have seen a lift in -- back or the production levels that Tropicana are back to where people might have seen them a few years ago, certainly prior to when we bought them as the Havana cutback has hit commercial production. So we are seeing additional production coming from that, but that's not -- that's what we expected to see. That was part of the -- part of our expected value proposition that we were buying into back when we bought it just over a couple -- well over a couple of years ago.

Yes. Apologies, I must have read that sentence wrong. But last one for me, just your final comments there about potential to sort of bring the closing of the hedge book forward. Are you thinking of accelerating deliveries into the hedge book? Or is that -- are you looking at sort of financial avenues to sort of bring the closure forward? Just a bit more on that would be good.

Yes, probably more of the latter than the former. You don't want to -- our idea and the options that we're looking at is really, does it make sense to take the book out completely. We got the capacity to do that, how does our balance sheet look afterwards, certainly our cash generating on a monthly basis at an annualized AUD 170 million, you're adding AUD 12 million to AUD 15 million a month in additional cash flow by doing it. So there are a few things that we look at. I'm not sure whether we'd accelerate them. We'd probably just bite the bullet and take it out. But that's an option that we -- that's what we're evaluating at the moment.

[Operator Instructions] Your next question comes from David Coates from Bell Potter Securities.

Can you hear me?

Yes, we can hear you.

[indiscernible] dropping in and out this morning. A couple of quick ones. McPhillamys, I mean, [ let's ] have the March quarter feasibility update and potentially FID June quarter. Are you able to give us kind of any other -- getting any sort of concrete signs on this on the Section 10 coming through?

I'd love to be able to, but I can't at the moment. We've just been -- yes, we've obviously been putting our inquiries into the department and getting the constant responsive -- we'll let you know. But we're pushing on with this plenty that we can do and as we work to finalize the feasibility study. So we'll just keep pushing on.

Yes. Understood. Understood. In your comments, you just mentioned the stockpiles due to the North, they'll obviously be coming into the mix. Just from the comments you made, it sort of sounded like that's potentially a little bit of a movable feast with the gold price ticking up a little bit. Are you sort of -- is that processing run sort of likely be extended in a higher gold price environment?

Look, you're right, it is a bit of -- it is very much a moving feast. This low grade -- these low-grade stockpiles are exactly what they -- what -- as we described in their low grade. They've been building over many, many years. And at the current price, I mean, this time last year or probably 18 months ago, we thought there was viability in it. I think I've always said, if we make a couple of dollars an ounce, we'll do it. But the inflationary impacts on costs over the last 12 or 18 months have made that much more -- much harder and basically impossible, of course, what we've seen. There's a pretty good gold price that we're sitting on at the moment. So that could influence it. Yes, we've got to wait and see how things look in the middle of next year or probably by the end of the March quarter before we make a call on that.

The key things for us is just making sure that we're managing the costs as best as we can, and we'll start -- we'll keep running with that over the next quarter or 2. And then with that information, we'll also see whether the inflationary pressures have sort of eased a bit. Does it make sense to continue on or do we just put it into care and maintenance while we wait for other material.

All right, sure. And finally, just on the Havana underground, the feasibility study there. Can you give us a bit of a -- I understand that it's emerging and work in progress, but can you give us a bit of a sense of scale of that operation compared to the Tropicana -- existing undergrounds at Tropicana?

Yes. Look, I'm a little bit reluctant to do anything too much. I mean, really, it's a conceptual -- well, it's a little bit more than conceptual, but we're still working on the -- on really what the options might be in terms of scale and, well, annualized production. But there's still -- I mean it's material enough to make a difference to the underground production, which is why we're excited about it. [indiscernible] got a little bit more information, which I'm hoping will be later next year, we'll be able to sort of expand a bit more and give an indication on the value that that brings.

Your next question comes from Meredith Schwarz from Bank of America.

Can I just follow on with McPhillamys? So I'm just trying to work out if you get delayed potentially and you don't get the Section 10 until closer to the end of the year, say, December, does that mean that you're still going to stick to the March timeline for the DFS? Are you going to be potentially taking -- reducing the sort of work that you need to do to feed into the DFS? I'm just trying to think about is there a fixed timeline to deliver or whether that could be pushed out? And what other work you may need to do after the DFS, if you've kind of cut a few corners there to deliver the timeline?

Yes. Look, I think the -- one of the things that we've been talking about is the Section 10 has limited access for us to get some construction quality -- construction cost related information. I guess we might have taken a view that we'll continue with the estimations. But at the moment we're evaluating just how wide an allowance do we have to make for what we don't know in terms of some of that geotech. If we -- so I mean in the end, you can set any date for, if you like, within reason, of course, you can set any date for completing the study, but the less information that you've got feeding into it, the more variables, the greater the range of confidence.

So we'll make a call as to -- as we get closer is that are we sufficiently confident that we could perhaps firm or land on a number that's got a couple of unknowns in it, but they're in an area that the risk is quite minimal? Or is it an area that we'd want to get more information before we finalize it? And of course, the sole difference there is that we might land on it and publish our DFS, but not make the FID until we've tightened that one particular risk area. I mean there's a lot of moving parts in that, but there's -- so, I hope that sort of answers the question.

Yes, yes, it does. So you may refine some of your -- potentially your cost estimations between the DFS and FID and then make a decision on -- with FID with potentially some updated numbers in the meantime between DFS and FID. So I think that answers my question. It's a little bit more clarity just on -- yes, from what I wanted to know there.

Yes. Look, our preference is, of course, you do an FS, feasibility study. We don't want to have -- we prefer not to have uncertainty in it and say, oh, yes, we finished the study, but we haven't -- we've still got more work to do to final -- to tighten up the numbers. That's actually the least -- it's a horrible situation because then you've got the sort of the worst of both wells, you've provided a number and you haven't provided certainty. So that's not really what we want to do. We want to make sure -- we have to evaluate it as we go. But we're thinking that as we look at some of the detail we're after, actually, the variability that we might have to provide for as a result of not having all of the information might not be that significant. So we're just doing that work at the moment.

So I'm trying to avoid saying we're going to come out with the study and then we're going to do more work and refine the number again. That's not what we want to do. That's -- rather than saying we're coming out with the study, and then we're going to do a bit more work and you know what it might go up more likely that -- our objective would be come out with the study and with a certain range of confidence. And if we feel it's needed, we might do a bit more work solely intended to restrict -- to limit up the potential contingencies, for example, rather than the absolute number.

Yes. Great. That's clear. And a second question on Duketon South. I noticed the grades were a little bit lower for the quarter, primarily on that -- the open pit in the transition and some extra stockpile material. Are you expecting the grades to bump back up over the next 12 months as production stabilizes from those new sources and sort of like looking at sort of similar levels to what you have over the last 12 months?

Look, we'd expect the -- I mean, I think if you look at what our numbers were -- our production was for the year -- sorry, for the quarter and how that fits in with our guidance, we might -- we'll see, as you always do, the grades shift and move around. But we're pretty well being on. We haven't made a comment about guidance, but we're clearly within guidance. And so we might see movements from -- I'd expect that we might see mining grades lift a little bit. The milling grades will shift around depending on which -- on the schedule that we've got lined up for each month for the low-grade stockpiles that we might be feeding in. So we have low grade stockpiles down at Duketon South as well. And if we have some spare capacity for a week or a couple of weeks, we'll shove low grade into it just to keep the mill full. But I don't -- I think if you look at what our numbers are going to be over the year, we'll just see -- they're not going to see a spectacular rise in the grade, it'll probably go up a little bit back in line with the previous quarter. But our production will remain reasonably consistent.

Your next question comes from Hugo Nicolaci from Goldman Sachs.

A couple of questions on costs, but maybe just quickly a follow-up around the hedging piece and closing that out early. If you're going to -- as you put it by the Board and close the whole thing out, would that just be simply paying the difference between the hedge price and the forward curve on volumes? Or is there some extra fees in closing that out early?

I'll answer that one for you. Hugo, look it's never quite exactly just the mark-to-market position because that's always calculated off of midpoint. There's a bit of a spread there that you've got to deal with when you're entering closing out those transactions, but it's quite immaterial amounts, insignificant, certainly in the context of the hedge.

Yes. If you were trying to model the impact, you just take the -- whatever the spot prices on the day subtracted off the hedge value of AUD 1,571 multiply by the answers, and you're pretty close, so many other things in our business to vary. And that's a thing for us that we evaluate how much of that cost, what's our balance sheet looking like what's the outlook and the value in it, and can we do it without -- make a sensible move without putting our near-term liquidity initiative. And we certainly, with 8 months and 2 days and less approaching it's making the potential for it to be a real option for us, it's certainly materializing.

Great. And then just on costs, it looks like relatively low sustaining CapEx in the quarter. Can you just remind us of what the timing of that sustaining CapEx is across both assets for the rest of the year just with regard to the planned maintenance and the like?

Yes. Look, we have -- there's obviously a weighting in this quarter. I think if you did the simple math and multiply Q1 by 4, you'd be -- you'd see we're well over, but that's obviously impacted by timing and mine schedules and movements to commercial production and those sorts of things. So we're still holding -- we're keeping a close eye on whether inflation is pushing any of those unit rates up and whether that's going to have an impact on our growth guidance, and we're certainly not seeing anything to make a decision on that at this point.

The other thing that I would add as part of the Havana underground, there'll be a little bit of thought going into, well, what additional extra unplanned development that we need to put into access that area as part of moving the project into the next phase. And once we've got a bit of a handle on that, if it's material, then we'll let people know. But I'm not expecting that to be anything of substance at all...

That makes sense. I mean, and then just sustaining CapEx piece, just shutdown. I mean did you have any shutdown in September quarter and then broadly what the outlook for the rest of FY '24 looks like there?

Yes, we did. We had shutdowns across the board at Duketon, but I wouldn't see those as being overly material. I mean they just average out pretty quickly.

Yes. No, I thought the case. And then just last one for me. Just looks like a bit of a step-up in mining costs, the drop in the quarter. Is that simply just a factor of a step-up in underground ore? Or are there some other factors there as well?

Are you talking about the all-in sustaining?

Mining costs specifically?

I think, yes, because we've seen an increase in the proportion of underground production, we're just seeing a bit of an elevation in that. But of course, we're also seeing the pit -- Havana pit is getting a little bit deeper and we're moving more material. And yes, in terms of -- there's no more preproduction at Tropicana that's going off into growth capital or anywhere. It's all reporting into the sustaining costs.

Your next question comes from Kate McCutcheon from Citi.

Okay.

I think the lines might have been mixed up, Alex. Just on McPhillamys, can you talk to if there are any -- if you're seeing any further changes in CapEx expectations? At the June quarter, you mentioned that some costs have started to come down.

In where, sorry, Alex?

At McPhillamys in terms of future CapEx expectations.

No. I mean we still -- I think we've been saying this in AUD 500 million or AUD 600 million. It's a little bit too early to make any comment about anything materially coming down. I mean there's certainly -- the pressures that were there 18 months ago have dissipated, but then inflationary impacts have come in through that as well. So I think we've just got to wait until we see where that number plays out.

There are no further questions at this time. I'll now hand back to Mr. Beyer for closing remarks.

Okay. All right. Thank you. Thanks, everybody, for joining us. As always, if you've got any follow-up questions, please give us a call, contact Ben, and we'll do what we can to help you out where we can. Otherwise, thanks very much for joining us, and have a good day.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.