Another gold mine in central western NSW is on the horizon, with the definitive feasibility study at Regis Resources’ (ASX:RRL) McPhillamys gold project confirming the project as a long-life, low-cost open cut operation.
Regis announced on Monday that the study (a DFS) will be followed by the Final Investment Decision (FID) in 2025-26.
Regis acquired the prospect 12 years ago and has spent around $150 million bringing it to its current stage, where development will soon begin.
The mine will be in the same region as the Tomingley gold mine of Alkane and the giant gold-copper operations of Cadia (Newmont/Newcrest), Cowal, and Northparkes (Evolution Mining), as well as prospects at Kaiser and Boda (Alkane) and Corvette (Magmatic).
Regis is currently swimming in cash and will clearly have the resources to finance the new mine, with costs currently estimated at nearly $1 billion.
"Total pre-production capital is $996 million, including $73 million of contingency and $70 million of pre-production operating costs that are capitalised," Regis said on Monday.
With a solid group production of 106,400 ounces of unhedged gold in the June quarter and a previously disclosed $20 million tax refund received early in the quarter, Regis saw very strong growth in its quarterly cash and bullion balance. This was up a record $109 million from March 31, 2024, to its highest ever position of $295 million at June 30, 2024.
Group production for FY24 was 417,700 ounces of gold, within the FY24 group production guidance range.
McPhillamys now has an updated ore reserve of 56 million tonnes, with a peak annual gold production of 235,000 ounces, averaging 187,000 ounces per year during full production.
Assuming Regis replaces depleted ounces over the next four years on a one-for-one basis, the company could be producing over 600,000 ounces a year of gold.
Regis Resources CEO Jim Beyer said, “The study clearly demonstrates the opportunity and value proposition that was recognized when we acquired the project in 2012."
“McPhillamys is a long-life, low operating cost, expandable open pit project. It will produce profitable ounces for our shareholders while generating significant benefits for our local and regional communities and other stakeholders.”
McPhillamys is set to deliver gross revenue of $5.2 billion (at $A3,000 an ounce for gold, currently around $A3,600).
Regis says there is significant future value growth potential at nearby Discovery Ridge and Kings Plains prospects, which represent opportunities to enhance the scale and improve the economics of McPhillamys.
“McPhillamys is located in the heart of a prolific gold belt, and we believe there is further value to be extracted from the project,” Beyer said.
“Between now and when the project is presented for a final investment decision in the 2025–26 financial year, our teams will advance value engineering and optimization works to enhance the project economics.
“We will work on optimizing the capital requirements and seek to expand the current mining inventory.”
