Regis Resources Limited

Thank you for standing by and welcome to the Regis Resources half year results briefing. All lines have been placed on mute to prevent any background noise. After the speaker's remarks there will be a question and answer session. If you would like to ask a question during this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question press the star one again. For operator assistance at any time please press star zero and finally I would like to advise all participants that this call is being recorded. I'd now like to welcome Jim Beyer, Managing Director and CEO to begin the conference. Jim, over to you.

Thanks, Paulie. Good morning, everyone, and thanks all for being on the call with Regis Resources for our December 2026 half-year financial results. I'm joined by our CFO, Anthony Rikiki, our COO, Michael Holmes, and our new Head of Investor Relations, Matthew Collins. Welcome, Matthew. On this call, we'll be referring to various slides that are in the pack that was released earlier this morning, and if you don't have it, the document can be downloaded from our website or the ASX. Pardon me. So now moving through the slides to slide number three, this is a great slide, and it highlights the continuing step-up in financial performance for the half underpinned, of course, by the favourable gold price environment. Running down the list, of financial results, we're very pleased with the continued uplift in earnings, in profitability, in cash generation, reporting both a record net profit after tax and cash flow for the period. Across our assets, we've seen solid and consistent operational performance, which we expect to continue into the second half of the year. Coal production and all in sustaining costs for the first half of FY26 was in line with expectations. at nearly 187,000 ounces of gold at an all-in sustaining cost of $28.50 per ounce and that includes a $188 an ounce non-cash charge for stockpile inventory drawdown. Now, we sold our gold into another period of record spot gold prices and at the end of December, we finished with $930 million of cash and bullion after a build of $430 million in just six months. Furthermore, The company is debt free. Our balance sheet is in a very strong position and given the cash generating capability of our assets, it continues to strengthen each day which positions us well to capitalise on growth opportunities. In line with our strong balance sheet position, the board has formalised a new capital management policy which we have also released today. The new policy provides a clear structure for returning capital to shareholders while also prudently allocating capital to existing operations, maintaining a strong balance sheet and funding continued growth. We expect to pay a fully franked ordinary dividends on a semi-annual basis, having regard, of course, to prevailing cash and bull imbalances, business cash flows, available franking credits and other capital allocation priorities. Ordinary dividend payments are expected to represent between 25% and 50% of the group cash increase over the preceding half financial year. Now this has led us to the declaration of a $0.15 per share fully franked dividend for the half for a total of about $114 million and we look forward to being able to continue to deliver strong shareholder returns. And with that, I'll hand over to Anthony to take us through a bit more of the detail on the half-year results.

Thank you, Jim, and good morning, everybody. I'll start by having you all turn to slide number four. And with that, as well as the very impressive financial performance, as we discussed in the recent quarterly, the half-year outcomes show we are very much on track for our full-year guidance numbers. We sold 182,000 ounces of gold into an increasing spot price market, realising just under $6,000 an ounce over the period, and that underpins high cash inflows and overall profitability. Those cash flows resulted in $639 million of statutory operating cash flow. Remarkably, we also delivered a $323 million net profit after tax, a record, as Jim mentioned, compared to the $88 million in the first half of FY25. And you'll see on the bottom of slide four that the change in the net cash and bullion was a whopping 306% increase, remembering that we had $300 million in debt at 31 December 24, and we're obviously debt-free now. You'll see some more of the cash build-up in the upcoming slides in this presentation. Now, just turning to slide five, and that shows the cash and bullion movement during the period. You'll be familiar with this chart from our recent December quarterly report, which is in the format that we've been using for a long time now in our quarterlies. So this chart includes our bullion on hand, which is valued at market price rather than at cost in this instance. If you have any questions on the difference in the presentation of these cash flows versus our statutory cash flow statement in the half-year report, please feel free to ask and we can point you to the differences in classifications, et cetera. Now, reading this chart, it's clear to see that our operations generated in excess of $700 million in the half and we spent $190 million on capital, inclusive of our growth projects. $39 million on expiration and $10 million at McPhillamy's. Additionally, $19 million of expenditure was for corporate costs, interest and facility fees. And of course, you can see the $38 million dividend payment we made back in October. Moving on to slide six now, you can see a simple yet effective representation of the ability of our assets to generate significant cash. Over the past six months the business has generated $413 million of cash and bullion and look at that since December 2023, over a billion dollars. Importantly, this is not by doing anything extraordinary, it is by being unhedged and by delivering what we said we would do and doing so in a healthy spot gold price environment. Now onto our income statement and that's at slide seven. The layout on this slide shows our income statement and the simple, transparent flow from our sales to our statutory net profit. During the half year, gold sales revenue was up 40% off the back of record spot gold prices. Costs of goods sold were similar to last time round and finance costs were down, now with the extinguished debt. But you'll see tax expenses up and you'd expect that off the back of such high pre-tax profits. And that's a reminder for you all that we move back to tax payments in cash from next month. So all said and done, the half-year profit after tax is a magnificent $323 million, up 267% on the corresponding half. Now, following on from... All of the strong cash flows and profits I've mentioned, naturally our shareholders' minds turn to dividends and other shareholder returns. The Board has responded to this with a new capital management policy, the key elements of which are summarised there on slide number eight. The first immediate result of this new policy is the declaration of a 15 cents per share fully franked dividend, a significant increase on the 5 cents per share dividend we paid back in October last year. And importantly, we look forward to making French dividends a regular part of the investment experience in Regis. Thank you, and back to you, Jim.

Thanks, Anthony. Pardon me, and ending the slides with a dividend that's three times larger than the one we paid for the whole of last year is certainly a great spot, and that's just for the first half is a great spot to hand over from. Look, the ability for Regis to pay these dividends in line with our new capital management policy is really a testament to us delivering what we said we would consistently deliver for a bit over two years now and reaping the rewards of the gold price environment. Now, I'd ask you to move to slide seven briefly for no other reason than really just to reiterate sorry, to slide nine to reiterate the guidance for the year. There's nothing special there. We haven't changed it. We're still on track, so nothing new there. Obviously, the gold price is very beneficial to us, but if you can't consistently deliver the gold ounces from your projects into today's gold price at a reasonable cost, you can't take full advantage of the price environment for shareholders. And we've been able to take that advantage, and the proof is in the significant returns we're now able to deliver to shareholders. So if we just move to slide 10, please. So in summary, we are unhedged, debt-free, and Regus' consistent operational performance continues to generate cash. With Regis resources, with Regis, the records for the first half include record statutory net profit after tax, record cash flow, and that gave us $930 million net cash and bullion at the end of December 25, delivering over $1 billion in cash bill since December 23, and there is clear ongoing cash generating capacity. We reinstated dividends with a new capital management policy paying that 15 cents a share for a total of $114 million, fully franked, giving just on, fractionally under, $700 million now totally paid, total payment in fully franked dividend returns since 2013. At the end of the day, there's no need to promise chocolates tomorrow when we're making them today, returning them today, and you can eat them today. We'll continue to progress our growth strategy while producing profitable answers and so look on that note thanks for listening and I'll now hand it back to Paulie and open the floor up for questions.

Thank you Jim and as mentioned we will now begin the Q&A session. As a reminder if you were listening by phone and would like to ask a question please press star followed by the number one on your telephone keypad to raise your hand and join the queue and to withdraw your question press the star one again. When called upon to ask your questions, please use your device handset and ensure you are not on mute. And your first question comes from the line of Levi Spry of UBS. Please go ahead. Morning, Levi.

G'day, Jim and team. Thanks for your time. It is day. Great news on your DV policy. I guess on my mind a little bit is just... The next little while, we don't see material capex looming, but what is the update on McPhelomys? It's a typical sort of project that's been left behind through this gold cycle. Lots of optimisation to be had. So, yeah, what's the update?

Thanks. Yeah, good question. So, in December last year, we were in court. We basically got the two-prong approach to McPhelomys. We are... We're in court with the judicial review. We feel that there was some missteps in the process and the justice that we were allowed or the proceedings and the way that the process was run and we're appealing that. That's been heard in court. The judge has reserved his decision. There is no set timeline on when to expect a response on that, but we'd like to think that that will be by the middle of the year. If we're successful there, and obviously we believe we should be, then the new minister and department will go and review and correct those procedural issues, and then we'll see whether it makes a new decision. You know, that obviously takes quite some time. Things like that don't happen quickly. So we're working on hoping that that occurs. But what we're also doing at the same time is we've identified an opportunity and we've still got a lot of test work to do, but we think that there may be an option for what's called an integrated waste landform. We basically... press the tails, turn it into a cake and commingle it in the waste rock dump. Now, that is a whole new process and will take quite some time to work our way through the approvals process, assuming that we can get it, of course, which is not certain. Either way, we're anticipating that we wouldn't be in a position to make any FID on McPhilemys until probably early 2028. So while we're spending money on it, and there's clearly a project there, I think it's going to cost us about, over the next couple of years, about $60 million maybe to get it to that point. Clearly, we'd love to have the mine running at the moment, but that's the time, which is really saying it's at least two years or around about two years before we start spending on it. So McPhillips is very significant in our medium-term capital demand, but not in the near term. I think that answers your question. Levi? Hello?

Sorry. Yeah, thanks for the update, Jim. Thank you. Appreciate the detail.

Yeah, no worries. And your next question comes from the line of Alex Barkley of RBC. Your line is open.

Thanks. Good morning, Jim and team. A question on the need of franking credits. Are you able to give the current balance? And when you say it's going to be a factor going forward, does that mean you want to keep it at 100% fully franked gives? Do you expect that's pretty achievable, even if hypothetically you get towards the top of that payout ratio? And then as a follow-up, would buybacks ever be part of your capital management strategy? Maybe if the franking isn't there? Thanks.

Yeah, look, I'll let... I'll let Anthony answer the franking credit one, and then I'll come back to on the buybacks.

Yeah, look, on the franking credits, so we start paying tax again next month. We've effectively got the catch-up there for the FY25 period, and then once we make that, we start going back to making the regular installments each month, as you do when you're a taxpaying method. What that does, that's allowed for us, because that's happening in this financial year, it's allowed for us to make these dividend payments a franked payment in anticipation of those tax payments that we might start making next month. Now, the go-forward plan under the policy... is that from our expectations we'll continue to pay fully frank dividends and that's what we've stated in the policy. So we've mapped that out and the expectations are so long as we're profitable we're paying tax and that gives us the ability to keep paying those fully frank dividends and the calculation allows for that.

Yeah thanks. I think Anthony has mentioned before there's a quite a significant um tax payment that's due for back tax for basically i think fy25 of around 94 million uh that immediately gives us franking credits for now um uh we just have to have those by the end of this financial year and you know the prices and the profit is great um but it also means you've got to start paying tax so that will have an impact on our our cash cash flows going forward along with everybody else that's um making profits And I think, you know, in our modelling, we're quite comfortable that there's plenty of franking for us there. In terms of share buybacks, it's certainly in our policy to be something that's considered. For now, we've just decided to have that there in our policy, but we made no decision to action anything on that at this moment. But that will continue to be something we'll consider going forward. Okay, that's very clear. Thanks very much, guys.

And your next question comes from the line of David Coates of Bell Potter Securities. Please go ahead.

Morning, Jim and team. Congratulations on delivering the chockeys. Well done. Question on... Oh, yeah, I'm listening hard, mate. Just on... If I've done the numbers roughly correctly, whilst the linear capital management policy is 25% to 50% of half yearly cash billed, I think the distribution we've just announced is around 27% to 28% of that. Without getting too far into the weeds, just interested in some of the factors that have been considered in arriving at that payout ratio.

Yeah, one of the things that you need to, I mean, we do in that calculation take into account, you know, the cash bill, which is probably the way you've done that calculation. The other thing that we also take into account, which is effectively at the moment a non-cash impact, but it will be very shortly, is the payment of tax. So at the moment, we're not paying tax, but we're actually accruing an obligation. So rather than, you know, shoot off really quickly and pay a lot and then find, you know, crikey, we've got this big tax bill that we forgot to take into account. We actually, you know, we're watching what that accrual is and we're accounting for that. Because once we get into a regular rhythm of paying tax, as it's, you know, each month, which is where we're heading basically next year, then that becomes a little less, you know, it's easier to account for. But right now, we're just very cognizant of these tax payments that are upcoming and we just want to make sure that that's factored in. I hope that makes sense.

Yep, yeah, that makes sense. That makes sense.

I think if you do the numbers, you'll see that the payout was a bit higher. As a proportion percentage, it was a bit higher of what was available, yeah.

Fair enough. And then, because I was listening so hard, Jim, also just on the comment you made on capitalising on growth opportunities. As usual, you know, I'm sure you'll pull out of your top drawer your M&A list. But just on those sort of growth options, you know, obviously you guys got some organic stuff. I mean, what's the focus, I suppose?

Yeah, it's interesting. I mean, the team at site at Duketon is doing some great work on... on a couple of fronts. We're going back to old areas and Buckwell was a fantastic example of reworking, rethinking ground that had previously been walked away from and it's given us a great opportunity there to keep the mill full at Dugden North now for another five years and I think you know, giving you something like 30,000 or 40,000 ounces a year over and above what we've been anticipating out of Duketon, because we've always said Duketon should produce 200 to 250. Upwell's going to sit on top of that. So that's great, and the beauty of that is not much capital required relative to other things. Expiration is certainly an area where we will probably... As we have done, you've seen, we've increased a little bit of money into that and that's off the back of some great work the team there is giving us some good reasons to put some more money into it. Over at Tropicana, things just keep trundling along. I don't think at the moment there's anything significant. There's lots that hasn't already been done. you know, the undergrounds keep going, the exploration drilling keeps extending. We want to get back out in the field and do some exploration for open pits, which would be great. In terms of... You know, I've already talked about McFillamy's, but that's certainly longer dated. In terms of growth opportunities sitting in front, we're really... We're the same as everybody. You know, we're looking at options, really. I mean, I... Yes, we are looking, you know, is it right to use cash or is it right to use paper script? Is it right to do a bit of both? They're all the things that we consider in terms of how we fund it. We just haven't got to a point where we've been satisfied that something is beneficial for our shareholders and we'll just continue looking until we find something that does kind of work.

Fair enough. Great. Thanks, Gina. Really appreciate that, Tom.

All right, so... And your next question comes from the line of Adam Baker of Macquarie. Please go ahead.

Morning, Jim and Anthony. Thanks for the updated policy. It looks like a nice policy to reward shareholders on the dividend side of things. Just wondering with regards to the, you know, it's obviously cash that you also got bullion as well. Is this just bullion on hand? You know, are you also considering gold in circuit here or are you just drawing the line at bullion on the hand? And, you know, I'm noticing at the end of

million dollars of bullion on hand is that kind of the level that you normally see that obviously it's depend on gold prices but um yeah just any clarity on that yeah that number moves around from up there it is just bullion on hand we don't belt we don't for that cash and bullion balance we don't count the value of stock and the reason that we're quite comfortable doing that is by the time the ink's dry on those reports, that bullion's usually sold. You know, there's nothing closer to actual cash than bullion that I know of. So when we declare our cash and bullion, and you're looking at those numbers there that I think we put in the report and we say how many ounces and what value, as I said, they're sold within a day or so. But we don't count anything that isn't... isn't an actual bullion bar that you can hold. And we don't hold, we don't do any strategic holding on the basis of, let's see if the gold price goes up. We just turn it pretty quickly and just push it out the door and send it off to whichever refinery that gold is due to go to.

Yeah, okay, that's clear. Thank you. And just secondly, on McPhillamy's, I might have missed it at the start there, but it sounds like the judge has had a couple of months to sit on this judicial review now. Do you have any indication when the outcome might come about?

Well, the case was heard in mid-December. There is no statutory period. You talk to lawyers and ask two lawyers a question, you get three different answers, but Oh, maybe we should delete that. But the guidance was don't expect anything for at least three months was sort of what people were intimating. But then all of that occurred, you know, that occurred just before Christmas and you don't, you know, people take January off. So if you add a month and a half to the three months, you know, you've got mid-December, mid-January, February, March, April. You know, maybe we'd like to think that we'll hear something in April or May, but we just don't know. We think it was all pretty clear. We believe that it wasn't particularly complicated. It was quite clear what our grievance was and the rationale behind it. But, you know, the law will... ..take the time that it requires.

Yeah that's understandable and the 60 million you mentioned to kind of get to FID in 2028 can you kind of give a rough breakdown you know how much of that is going into the drill bit and how much is going into desktop study work?

Look it's spread across a whole lot of things actual field actual testing um it's got and it's it's it could be up to that we've still got to work out exactly what we because it's sort of some of its sequential but some of its permitting some of its um legal fees you know ongoing legal fees some of its environmental studies that we we have to do again because Unfortunately, the project now has been delayed for so long and we've had to modify things that we've got to go back and do a whole bunch of new heritage reviews. And I tell you what, they are not the cheapest things to do these days. They are extremely expensive. and they never get simpler. They used to take days, then they took weeks. Now they seem to take months, and they've got to be cross-seasons. So there's costs involved in that. Of course, as the engineering works as well. So it's quite a gamut spread across the two years.

Okay, thank you. Awesome.

And before we continue on to the next question, a reminder, if you would like to join the queue, to press star 1 now. And your next question comes from the line of Matthew Fridman of MST Financial. Your line is open.

Sure. Thanks. Morning, Jim and team. Maybe firstly on the capital management policy, I guess looking at the dividend calculation, unless I've missed something, there's no mention of debt or I guess about thinking about your changes in your cash position on a net basis. So should we read into that that I guess the intention is to always be debt-free or You know, if you did have to draw down on debt for whatever reason, expansionary growth or an acquisition or whatever it may be, do you expect that'll trigger, I guess, a rethinking of this capital management policy?

Thanks. Well, we haven't had to mention debt because we don't have it, but that will be taken into account. But just we don't... We certainly don't take a view that we will only do it if we're ever debt-free. We think... You know, when we look at it, we think, all right, well, at the moment, we don't have massive demands for CapEx. You know, maybe McPhillamy's. There's no certainty that we'll make a decision to fund McPhillamy's completely out of cash flow. You know, we'd have a pretty lazy balance sheet if we did that. So certainly sometime in the future it would make some sense to have maybe a bit of debt on the balance sheet to fund a project but still continue to be in a position. The bottom line is we'd still be in a position to maintain dividends. That's all part of what the board will have to consider. We discussed what we would do in those situations. There's nothing wrong with debt as long as it's on responsibly and in fact it's quite reasonable to think that some companies have got some debt and continue to pay a dividend. That's a responsible business. But it's certainly right to say that debt will not necessarily stop us from paying dividends.

Okay, got it. Thanks Jim. I guess it falls under the consideration of future capital allocation requirements. Thanks.

Maybe moving over to... Just to sort of add a little bit. The one thing that we've just got to watch is, you know, we certainly don't want to appear that we're going into debt so that we can pay a dividend. You know, that's not what we want to... That's not the message we want to send, but we certainly think that it's having a bit of debt is reasonable on a balance sheet. You can manage it and you can still maintain a position to pay dividends when you look at the reasonable outlook. So we're quite comfortable with that concept. It's just right now we don't have to worry about it.

Yeah, certainly not an issue at the moment. Maybe changing tack to, I guess, the cost environment and cost pressures you're seeing. Obviously pretty healthy cash flows across the industry pretty broadly. So when you think about your I guess your mining contractors, your support services, your exploration budget that you've talked to, are there any material pressures that you're seeing as we start off a new calendar year or I guess as you think forward to the next financial year, what are your levers to control costs in that environment? And then maybe secondly if I can and maybe pre-empting your answer a little bit at least from a stripping perspective, Given the strong margins and the work you're doing across the operations to unlock more profitable ounces, how should we expect the stripping profile across the business to change or to pick up and what sort of impact is that going to have on your costs at IR Asset? Thanks, Jim.

Yeah, thanks, Matt. All right. Well, I mean, first off, generally the cost environment, I think we're seeing across the whole board generally sort of consistent with CPI. We are seeing hotspots really of availability of some personnel. Underground has always been a challenging space and continues to be. It just seems to have gotten a little... Things loosened up a little bit when the nickel underground a couple of years ago when the nickel guys all shut and operators were out there. That's certainly not the case anymore. We're seeing... We're seeing, yeah, you can always get a bottom on a seat, but what you're looking for is competent and experienced, and that's proving to be challenging. And it means that things take a little bit longer, or it means you might have to push the cost up a little bit. But generally speaking, we're not seeing any, you know, massive increases from CPI. In terms of the question of the stripping, I mean... If you talk about what are the big things that impact open pit mining costs per ounce of gold, it's strip ratio and grade. You can worry about CPI movements of 5% or 10% even, but if your strip ratio goes from 2 to 4, then that's a pretty scary impact on your costs, right? That's the main thing. So you're on the right track of asking that. I think, I mean, you know, things that will push it up, for example, up at Buckwell, we're up there now mining waste in preparation, and we've outlined that in the... That doesn't show up in our all-in sustaining costs until we start production. We actually... Pre-waste mining before commercial production, we treat it as great capital. I think the number we put on that was about 40 or 50 million. It was about 40. Other things that we are looking at, you know, we could... There are big cutbacks that we are considering for garden well and maybe even Gloucester, which are really, you know, strip ratios that are... If the gold price was 2.5, you wouldn't do it, but you might do it now. But that work is probably, if we're going to put them in our plans and agree to them, you know, some of them require 18 months or two years' worth of pre-strip before you actually get to the ounces. So we're not at a point where we're making decisions on that yet, but, you know, we probably, we certainly are evaluating all of those options at the moment. But if the Gulf price stays where it is, we certainly would be stupid not to or crazy not to be considering those, particularly if we've got spare milk capacity somewhere out in the future and it's there to be used. One of the things that we have done actually to sort of push our unit costs down Our contractor, Maccas, have just... We've got a 3600 digger on site, a big digger, which is allowing us to actually move larger volumes, you know, maybe 30% on a unit cost basis less than we were before. But we've factored all of those into our guidance. But, yeah, there are some... We've got options to take more cutbacks. We're also chasing options that might help reduce the unit costs, offset some of that. I think the big thing we need to consider with those big cutbacks and the big strip ratio numbers, you know, they make pretty good financial sense at $6,000 or $7,000 an ounce. Ideally, what I'd like to do is, you know, maybe have a plan to do that, but keep encouraging and keep the good work coming from our exploration team who are finding more near-surface, better-grade stuff. So we're chasing both of those options at the moment.

Yeah, got it. Thanks. It makes a lot of sense. Thanks for the commentary, Jim. Maybe just quickly, you mentioned Buckwell. Can you remind me, and you've probably said this previously, but when do you expect Buckwell is going to move into commercial production? Thanks.

Next, when is it heading to next year? Late next, later next year.

Next calendar year.

Yeah.

Got it. Thank you. And this does conclude today's Q&A session. I'll turn the call back over to Jim for closing remarks.

All right. Thanks, Paulie. Thanks, everybody. Good questions. We appreciate that. Thanks, everyone, for joining us. As always, if there's some things, I think as Anthony mentioned, some nuances of the accounts that you would need some explanations for or need, please feel free to give us a call, get in touch with Matt, share your details. And thanks very much for joining. Have a good day.

this does conclude today's conference call thank you all for joining us you may now disconnect