Regis Resources Limited

Thank you for standing by and welcome to the Regis Resources Limited full year results briefing. All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Jim Beyer, Managing Director and CEO. Please go ahead, sir.

Thanks Ryan and thanks everybody for joining us. Good morning. I would point out that we have released our results. There is a word document along with the PowerPoint slide that we will be referring to. So. That's how you can keep up. So thanks for joining us on the FY 24 results in the room with me. I'm joined by our CFO Anthony Rakiki. our Chief Operating Officer, Michael Holmes, and our Head of Investor Relations and External Affairs, Jeff Sansom. Pardon me. I'll also point out our release yesterday afternoon that related to the immediate impacts of Minister Plibersek's declaration of a Section 10 over the McPhilemys project. I'll touch on this briefly now, as there are implications of this decision that have been reflected in our accounts. Firstly, I note we continue to assess all legal options available to respond to this decision, and we'll be chasing every one of these. As I've said before, Minister Plebiscite's decision did take us by surprise, and it has meant that Regis has been required to assess the consequences of this action, and this has resulted in some material adverse commercial outcomes for the company. Firstly, Regis has withdrawn the outcomes of the recently released DFS, This has given the failure to achieve one of the key assumptions, which was a satisfactory resolution of the Section 10 application process. As we've said, the decision means we cannot construct and utilise the planned TSF, and as a result of this, Regis and investors can no longer rely on the outcome of this study. With this in mind and taking into account the complexity and the length of time required to find a potential alternate TSF location, and we know certainty that a viable option can be identified, we have impaired the carrying value of the project to the tune of $192 million. That is the immediate cost of this decision. With this Section 10 decision, we've also assessed the McPhilemys ore reserves, and we can no longer declare 1.89 million ounces of reserves related to the project. As a result, our group all reserves have been reduced from 1.89 million to zero. Now I'll let somebody else put a value on that goal. We also received review the mineral resource estimate and while the risk profile has changed considerably, the key assumptions remain valid and unchanged. As I said earlier, we also continue to assess our legal options available. However, I want to risk that are available to respond to this decision, but I do want to reiterate that these actions that we've taken as part of this in relation to the reserves and the write-down have not been made lightly. The decision and the resulting actions that Regis has had to take in response have had a material impact on Regis, but more so the impact to the communities in New South Wales is equally as significant. Regis can no longer deliver the expected 580 jobs in the construction phase and the 290 full-time jobs when in production. The Blaney community can no longer rely on the socio-economic benefits that were to stem from the project in the form of jobs, procurement, training, infrastructure, upgrades and other associated benefits. New South Wales can no longer rely on the $200 million of royalties from the project let alone the hundreds of millions of dollars from rates and taxes and revenue that were contributed to the Australian economy over this project's life. Now to change gears a bit, I'd like to discuss the Regis' overall FY24 results. So if you could turn to, well, move on from slide two, the disclaimer, and now move to slide three, please. Have a look at that. During FY24, the rest of the Regis business delivered very impressive results, both from an operational and financial perspective. But I'm pleased also on the ESG outcomes. So firstly on these ESG, from an ESG perspective, we delivered meaningful outcomes across safety, diversity, workplace culture, rehabilitation, decarbonisation and Indigenous engagement. with working together agreement and heritage management agreements at our Duketon operation, where our mutual objective is to build capacity, not dependency. As you can see, and as we discussed in our June quarter release, we either met our FY24 predictions on production, all in sustaining costs and growth capital, or outperformed by coming a little under, where we spent less on exploration and McPhilemys. Now getting into this performance, I want to point out some high-level metrics. Anthony will certainly drill deeper and put some more detail and context in later slides. Regis remains one of Australia's largest 100% unhedged, that's unhedged, not unhinged, 100% Australian-centric gold producer listed on the ASX. In FY24, we delivered several records largely due to the fact that we were no longer delivering into our onus historical hedge commitments. And as we pointed out before, we ended the year with record cash and bullion of $295 million. And our operating cash flow is also a record at $475 million. If we exclude the impact of hedge and one-offs in FY24, we delivered an underlying net profit before tax of $106 million. Now, to demonstrate the value of the business since we became unhedged, of the $297 million of EBITDA that we made over the year, we generated $234 of that since the closeout of the hedge book. The $297 million in EBITDA over the year, $234 since we closed out the hedge book. Our record cash and bullion of $295 was built with $140 million adding to it in the second half of 24. Our record cash flow from operations of 475, we generated 349 of that in the second half after the hedges seeing a pattern. There is some excellent more detailed analysis on our profit as well that Anthony will go into. So all in all, a very strong underlying business demonstrating the profitability and cash generating capacity of our current suite of assets as we've broken free of the shackles of the hedges. And now with that, I'll pass over to Anthony Rikiki, our CFO. Over to you, Anthony.

Thanks, Jim. That really covers a lot of it, but I'll focus on some areas a bit further. Looking at slide four now, so you could turn to that. Slide four of the presentation, and the numbers show an improvement in several areas since last year. But also, out on the right-hand side of that slide, we've shown the dramatic improvement that we've seen half on half in FY24. Across the top few lines there, you can see that we produced 418,000 ounces of gold, and we sold 424,000 ounces of gold. As you can see, pre and post hedge closeout, with the hedges being closed out in the first half of the year, the realised average gold price received was 27% higher in the second half. And I've said this in the June quarterly result call and recapping it now, looking back on the hedge book buyout in December, it did in fact turn out to be a beneficial outcome, as we'd expected. Taking into account the difference between the average buyout price of those 63,000 ounces we closed out and the average spot gold price we got for selling them into the spot market, we're about $14 million better off for having closed out the hedge book when we did. We generated a very strong underlying EBITDA of $421 million. Noting that number is the statutory income statement result adjusted for the non-cash impairment charges of $194 million. the $98 million hedge book buyout, and $26 million of non-cash inventory net realisable value write-downs. Going down the page, as Jim noted, the strong gold price and unhedged nature of the second half's gold sales drove a record FY24 operating cash flow of $475 million. Going over the page now to slide five. And regarding cash and bullion, We talked about this in the previous June quarterly release, so I won't dwell on this again too much, but what it shows is that the operations generate significant cash flow, even when considering their capital expenditure requirements. Regarding CAPEX, we spent $230 million on mining capital expenditure and an additional $66 million on exploration and MCFILMIS. Now look at the profitability over on slide six. If you turn the page, please. This slide reconciles our underlying profitability to our statutory net loss. If we look at FY24, excluding the impact of hedges and one-offs, we see a very profitable underlying business. From the top down in FY24, record gold prices offset lower gold production to generate $1.3 billion of gold sold at spot. Our cost of sales went up, as we stated in the quarterlies, due to the impact of deeper open pits, longer haulage distances, and we mined more underground ore, which is a bit more expensive on a unit basis. We also saw an impact of wet weather-related interruptions on our costs later in the year, especially at Tropicana due to the lower production. Our depreciation and amortisation was down 10% based on lower volumes mined versus the prior year, and after corporate and finance costs, the underlying net profit before tax was $106 million, up from $83 million in FY23. Impressively, Post closeout of the hedge book, the business generated a $57 million pre-tax profit. Then below that line, we have the one-offs and hedge impacts to come to our final statutory net loss after tax of $186 million. Moving on to the balance sheet over the page, slide seven, I think that the main point to focus on here is that we are at a net debt position of only $5 million. Our balance sheet is strong, and while we have corporate debt of $300 million maturing at the end of June 25, and now considered current, we generate sufficient cash to repay this if needed. However, we are currently assessing our debt options in light of the recent McPhillamy's outcomes. Well, that's about it from me, and I think I can safely reiterate Jim's sentiment. The operating business is in great shape. shown particularly in that second half of the year, with it providing a glimpse of what it's capable of delivering when unhindered by what was a very restrictive hedge book. Thank you all, and back to you, Jim.