Growth Portfolio

Overview: Regis Resources Limited (“Regis”, “the Company”) is an Australian resource company focused on gold mining. The Company’s primary asset is the Duketon Project, located near Laverton in WA, which is projected to produce 335-365k ounces of gold in FY18. The Company has a JORC compliant Ore Reserve estimate of 59.3mt at 1.14g/t for 2.18m ounces of gold and Mineral Resources totalling 8.05m ounces. The Company also owns the McPhillamy Project in NSW and exploration licenses in WA and NSW.

Catalysts: Regis’ Duketon Project has compelling economics in the current price environment and the Company is well-positioned to generate positive operating cash flow. Management targets a 2.5-12.5% increase in gold production with cash costs at the lower end of the industry average. Regis is well funded with over $150 million in cash and gold on hand allowing the company to weather short-term price volatility.

Hurdles: While Regis has a track record of meeting or exceeding its guidance, there is no guarantee that the projected production target can be achieved at a reasonable cost. Gold prices have fluctuated significantly in the past five years and ongoing price volatility could impair the company’s financial performance.

Investment View: Regis offers profitable exposure to gold industry trends. We are attracted to the Company’s current production profile, track record, magnitude of assets, and balance sheet. Risks include mining execution and the volatile gold price. The Company has organically grown its Duketon project through the strategic exploration of adjacent mining tenements, which has improved the project economics while a strong balance sheet allows for ongoing improvement works. Despite a two-year price recovery, gold prices remain ~30% below the cyclical peak and we believe Regis is well-positioned to create shareholder value and benefit from any further price recovery. We initiate coverage with a ‘buy’ recommendation.