Gold producer Regis Resources (ASX:RRL) has announced a full-year loss, driven by previously disclosed hedging costs, losses, and recent impairments to its under-development McPhillamys project in central western NSW.
This news follows the company's decision to abandon the McPhillamys project, withdraw its reserve estimate, and terminate its involvement.
Regis revealed a net loss of $186.02 million for the year ending June 30, significantly larger than the $24.33 million loss reported in 2022-23.
Despite selling 424,000 ounces of gold at an average price of $A2,976/oz (including hedge impact), the company incurred impairments totaling $371 million.
These write-downs included $192 million for McPhillamys, $81 million in pre-tax hedge delivery costs, and $98 million to close out its hedge book.
Regis's hedging strategy has now been revised, resulting in a full-year benefit from rising gold prices.
CEO Jim Beyer stated that the company is hedge-free and fully exposed to gold price fluctuations. He highlighted the positive cash flow and profit generated in the second half of the year due to the revised strategy.
Revenue for the year increased 11% to $1.26 billion, but the significant losses, particularly related to McPhillamys, have prevented Regis from paying a dividend.
The decision to write down McPhillamys was influenced by the Federal Environment Minister Tanya Plibersek's department issuing an environmental protection declaration that rendered the project unviable.
Regis closed out its hedge book in December 2023, benefiting from the rising gold prices in the second half of the year. The company expects full-year production of 350,000 to 380,000 ounces in FY25, with an all-in-sustaining cost of $2,440 to $2,740 per ounce. As of June 30, Regis held a record cash and bullion balance of $295 million.
