2017 ANNUAL
REPORT
CORPORATE
INFORMATION
ABN
28 009 174 761
Directors
Mark Clark
Paul Thomas
Mark Okeby
Ross Kestel
James Mactier
Fiona Morgan
(Executive Chairman)
(Executive Director)
(Deputy Chairman/Lead Independent Non-Executive Director)
(Independent Non-Executive Director)
(Independent Non-Executive Director)
(Independent Non-Executive Director)
Company Secretary
Kim Massey
Registered Office & Principal Place of Business
Level 1
1 Alvan Street
SUBIACO WA 6008
Share Register
Computershare Investor Services Pty Limited
GPO Box D182
PERTH WA 6840
Regis Resources Limited shares are listed on the Australian Securities Exchange (ASX).
Code: RRL
Bankers
Macquarie Bank Limited
Level 4, Bishops See
235 St Georges Terrace
PERTH WA 6000
Auditors
KPMG
235 St Georges Terrace
PERTH WA 6000
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CONTENTS
Highlights
Chairman's Report
Corporate
Duketon Gold Project
Gold Exploration
Reserves & Resources
Directors’ Report
Remuneration Report (Audited)
Auditor’s Independence Declaration
Financial Statements
Notes to the Financial Statements
Directors' Declaration
Independent Auditor’s Report
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ASX Additional Information
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2
HIGHLIGHTS
CORPORATE
24%
24%
Gloster ore delivery to the Moolart Well ROM // Photo by John Dumancic
8%
8%
8%
8%
15%
15%
NET PROFIT
AFTER TAX
NET PROFIT
AFTER TAX
REVENUE
REVENUE
REVENUE
REVENUE
EBITDA
EBITDA
DIVIDENDS
DIVIDENDS
Net profit after tax up 24% to
$138.2 million for the financial year.
Net profit after tax up 24% to
$138.2 million for the financial year.
Revenue up 8%
to $542.2 million.
Revenue up 8%
to $542.2 million.
EBITDA up 8%
to $253.3 million.
EBITDA up 8%
to $253.3 million.
Dividends declared for FY2017
up 15% to 15.0 cents per share.
Dividends declared for FY2017
up 15% to 15.0 cents per share.
CASH AND BULLION
Cash and Bullion increased to $151.7 million at 30 June 2017, up $28.4 million for the year.
CASH AND BULLION
Cash and Bullion increased to $151.7 million at 30 June 2017, up $28.4 million for the year.
2017
2017
2016
2016
APPOINTMENT
Appointment of Fiona Morgan to the Board.
$151.7 million
$151.7 million
123.3 million
123.3 million
REGIS RESOURCES // 2017 ANNUAL REPORT 3
DUKETON OPERATIONS
Record gold production at Duketon in FY2017 with 324,353 ounces of gold
produced at AISC of $945 per ounce.
Strong operating cashflow from Duketon of $256.1 million.
Commencement of mining and first production from the Gloster and
Erlistoun satellite deposits.
FY2017 production guidance increased to 335,000-365,000 ounces of gold
at AISC $940-1,010 per ounce.
EXPLORATION
Maiden reserve released for the Tooheys Well Gold Project contributes to an
increase in Ore Reserves during the period of 388,000 ounces net of depletion.
RC drilling programme at Rosemont Underground delivers gold intercepts with
excellent widths and grades.
Infill drilling programme at McPhillamys provides basis for maiden Reserve
estimate of 2.03 million ounces released in September 2017.
Acquisition of the Blayney Gold Project, located contiguous to the McPhillamys
Project for $3.25 million.
REGIS RESOURCES // 2017 ANNUAL REPORT 4
CHAIRMAN’S
REPORT
Dear Shareholder,
On behalf of the Board of Directors of Regis Resources it is my
pleasure to present to you the Company’s 2017 Annual Report.
Last year I wrote that our focus would be on delivering
operational excellence and organic growth to our business.
So it is pleasing that this year we achieved production of
324,353 ounces which was 6% higher than last year as
the Company’s organic growth strategy takes effect. This
excellent result also further consolidates Regis’ position
as one of Australia’s leading gold mining companies.
Some of the highlights of a very successful year include:
Outstanding operational performance at Duketon
with record gold production of 324,353 ounces at all in
sustaining costs of $945 per ounce.
The successful start-up of new mines at Gloster and
Erlistoun validating the strategy of blending higher
grade satellite ore feed to existing operations.
Net profit after tax up 24% to $138.2 million and EBITDA
up 8% to $253.3 million.
A fully franked final dividend of 8 cents per share
declared in August 2017 taking full year dividends to
15 cents per share.
The release of a maiden Reserve at Tooheys Well of 7.1
million tonnes at 1.61g/t Au for 366,000 ounces of gold
more than replaces mining depletion for the year.
Infill drilling programme at McPhillamys completed
during the year and the progression of two long term
water supply options culminated in the declaration of
a maiden Reserve estimate of 2.03 million ounces in
September 2017.
On the back of record production at Duketon, the Company
achieved strong financial results. Regis generated a net
operating cash flow of $206.1 million for FY2017 and at the
end of the financial year had cash and bullion holdings of
$151.7 million and no bank debt. The Company declared
full year dividends of 15 cents per share for 2017. This
represents a payout ratio of 14% of revenue and 54% of
profit after tax for FY2017 which further enhances Regis’
status as an Australian gold industry leader on dividend
payment metrics. Since Regis’ maiden dividend in 2013, the
Company has paid a total of $245 million (49cps) in fully
franked dividends.
It is pleasing to note that the Company’s record gold
production was achieved with the addition of higher grade
ore feed from the Gloster and Erlistoun open pits. The
commencement of mining at these satellite operations
during the year was the culmination of a strategy
embarked on two years ago to blend higher grade satellite
mill feed to the existing processing plants at Moolart Well,
Rosemont and Garden Well.
With a full year of production from Erlistoun and Gloster in
FY2018, production is expected to increase and be in the
range of 335,000 - 365,000 ounces at an all in sustaining
cost of $940 - $1,010 per ounce. Gold production at these
levels is expected to be maintained in the medium term
with the introduction of Tooheys Well ore in future years.
The addition of 366,000 ounces of gold to Regis’ Ore
Reserves with the release of the maiden Reserve at Tooheys
Well during the year further demonstrates the excellent
organic growth potential that aggressive exploration of the
prospective Duketon greenstone belts controlled by Regis
can deliver. Further regional exploration programmes are
planned in FY2018 together with drilling programmes at
the Rosemont deposit targeting the release of a maiden
underground resource later this year.
A significant amount of work was undertaken during the
year on the McPhillamys project in NSW. A 45,000 metre infill
drilling programme was completed during the year with the
results used to estimate a maiden Reserve of 2.03 million
ounces in September 2017. The development of the project
represents an outstanding organic growth opportunity
for Regis and we look forward to pushing ahead with the
final elements of the DFS and then submitting permitting
applications immediately thereafter.
Regis sits in an enviable position in the Australian gold
industry. We have a blend of quality operating and
development assets that provide the platform for future
organic growth. Our strong balance sheet and robust
cash flows underpin our commitment to paying dividends
to shareholders as well as provide the opportunity for
further growth outside our current projects.
None of the achievements of the last 12 months would
be possible without the hard work and dedication of the
Regis team. I would like to thank all Regis employees and
contractors for their relentless efforts and commitment
over the last 12 months and look forward to continuing to
build on this success in 2018.
Yours sincerely
Mark Clark
Executive Chairman
REGIS RESOURCES // 2017 ANNUAL REPORT It is pleasing that this year we
achieved production of 324,353 ounces
which was 6% higher than last year.
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Revenue
Revenue
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465
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544
544
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372
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2014
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2017
2017
6
CORPORATE
Driven by record production at the Duketon Gold Project,
Regis reported a 24% increase in profit after tax for the
2017 financial year of $138.2 million.
EBITDA
EBITDA
300
300
250
250
200
200
181
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141
141
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234
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253
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46.6% 46.6%
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This strong result was on the back of an 8% increase in gold revenue to $542.0 million driven by a 6% higher delivered
gold price and a 4% higher sales volume. Accordingly EBITDA increased by 8% from the previous period to $253.3
million for FY2017.
37.9% 38.9%
37.9% 38.9%
M
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$
$
100
100
40
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150
150
Regis sold a total of 319,407 ounces of gold during the year at an average price of A$1,691 per ounce. The Company
delivered the gold produced during the year into a combination of spot deferred contracts and at the prevailing spot
price. At the end of the financial year the Company had a total hedging position of 396,406 ounces of spot deferred
contracts with a delivery price of A$1,551 per ounce.
2016
2016
2014
2014
2015
2015
2017
2017
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EBITDA
EBITDA
EBITDA Margin (%)
EBITDA Margin (%)
50
50
The following graphs illustrate the strong performance of the Company across several profit metrics.
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Revenue
Revenue
502
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2015
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2016
2016
2017
2017
EBITDA
EBITDA
234
234
253
253
100
100
80
80
181
181
141
141
37.9% 38.9%
37.9% 38.9%
2015
2015
2014
2014
EBITDA
EBITDA
60
46.6% 46.6%
60
46.6% 46.6%
40
40
20
20
0
0
2016
2017
2016
EBITDA Margin (%)
2017
EBITDA Margin (%)
Net Profit After Tax
Net Profit After Tax
138
138
112
112
87
87
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Earnings & Dividend
Earnings & Dividend
Per Share
Per Share
27.6
27.6
22.4
22.4
17.4
17.4
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6
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15
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13
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2014
2014
2015
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EPS
EPS
Dividend Per Share
Dividend Per Share
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FY2014 NPAT, EBITDA & EPS adjusted to underlying result by excluding $202.7m after tax impairment charge
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Net Profit After Tax
Net Profit After Tax
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2014
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2016
2016
2017
2017
Earnings & Dividend
Earnings & Dividend
Per Share
Per Share
27.6
27.6
22.4
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EPS
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Dividend Per Share
Dividend Per Share
REGIS RESOURCES // 2017 ANNUAL REPORT
Net cash from operating activities of $206.1 million was in line with 2016 as higher production at the project was
offset by higher start up stripping at the new satellite operations. Robust operating cashflows from the project
generated an increase in the Company’s cash and bullion holdings to $151.7 million, up $28.4 million from the previous
year even after the payment of dividends, start-up capital expenditure at Gloster and Erlistoun and the extensive
resource drilling programmes at Duketon and McPhillamys.
20
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Dividends Declared
The Company paid a total of $80.1 million in fully franked dividends during the year and subsequent to the end of
the financial year declared an 8 cents per share fully franked final dividend. The final dividend was declared after
consideration of the strong cashflow and profitability from the Company’s Duketon operations in FY2017. The full year
dividend of 8 cents per share coupled with the 7 cents per share interim dividend paid in February 2017, took the full
year pay out to 15 cents per share. This represents a 14% payout of FY2017 revenue and 54% of net profit after tax.
Since the commencement of dividend payments in 2013, the Company has paid a total of $245 million in fully franked
dividends (49cps).
Interim
Final
2016
2015
2017
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Dividends Declared
Cumulative Dividends Paid
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Interim
Final
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245
170
75
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105
2013
2014
2015
2016
2017
The following chart details the movement in the Company’s cash reserves over the financial year:
Cumulative Dividends Paid
300
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400
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245
Cash & Gold on Hand - FY 2017
170
$256.1
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($80.1)
2015
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2017
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($49.6)
($35.6)
($24.9)
($36.2)
$4.3
($5.7)
$151.7
$123.3
Ju ne 2016
O perations
Dividen ds
Mine D evelop m ent
Exploration
& Evaluation
Other Capex
Inco m e Tax
Invest m ents
Other
Ju ne 2017
Operating cash flow differs from the statutory Statement of Cash Flow “net cash from operating activities” as it is quoted under the Appendix
5B classification protocol and includes movement in gold bullion on hand
REGIS RESOURCES // 2017 ANNUAL REPORT
8
DUKETON
GOLD PROJECT
The Duketon Gold Project is located in the North Eastern Goldfields of
The Duketon Gold Project is located in the North Eastern Goldfields of Western Australia
Western Australia approximately 130 kilometres north of Laverton.
approximately 130 kilometres north of Laverton. The project area consists of two operating
centres being the Duketon North Operations (“DNO”) comprising the Moolart Well Gold Mine
and surrounding satellite deposits including the Gloster Gold Mine; and the Duketon South
Operations (“DSO”) comprising the Garden Well and Rosemont Gold Mines and surrounding
The project area consists of two operating centres being the Duketon North Operations (“DNO”) comprising the
Moolart Well Gold Mine and surrounding satellite deposits including the Gloster Gold Mine; and the Duketon South
satellite deposits including the Erlistoun Gold Mine. The Duketon Project has in excess of 1,000
Operations (“DSO”) comprising the Garden Well and Rosemont Gold Mines and surrounding satellite deposits
including the Erlistoun Gold Mine. The Duketon Project has in excess of 1,000 square kilometres of exploration and
square kilometres of exploration and mining tenure.
mining tenure.
In 2017 the Duketon Project produced 324,353 ounces of gold which was at the upper end of
FY2017 guidance of 300,000-330,000 ounces and the highest ever production since operations
commenced in 2010. As expected the project benefited from the introduction of higher grade ore
feed from the commencement of operations at satellite deposits, Gloster and Erlistoun. Milled
grade across the Duketon Project increased by 8% to 1.11g/t and validated the strategy of
pursuing organic growth through aggressive regional exploration programmes across Duketon.
All in sustaining costs were $945 per ounce which was below the lower end of FY 2017 cost
guidance and reflected the excellent cost control at the operations.
4
REGIS RESOURCES // 2017 ANNUAL REPORT
In 2017 the Duketon Project produced 324,353 ounces of gold which was at the upper end of FY2017 guidance of
300,000-330,000 ounces and the highest ever production since operations commenced in 2010. As expected the
project benefited from the introduction of higher grade ore feed from the commencement of operations at satellite
deposits, Gloster and Erlistoun. Milled grade across the Duketon Project increased by 8% to 1.11g/t and validated
the strategy of pursuing organic growth through aggressive regional exploration programmes across Duketon. All
in sustaining costs were $945 per ounce which was below the lower end of FY2017 cost guidance and reflected the
excellent cost control at the operations.
9
Operating results for the entire Duketon Project are summarised below:
Ore mined
Waste mined
Stripping ratio
Ore mined
Ore milled
Head grade
Recovery
Gold production
Cash cost
Cash cost inc royalty
All in Sustaining Cost
Mbcm
Mbcm
w:o
Mt
g/t
%
koz’s
A$/oz
A$/oz
A$/oz
2017
4.56
25.55
5.60
10.85
9.78
1.11
93
324
790
864
945
2016
4.63
22.62
4.89
10.79
10.25
1.03
90
305
773
845
927
DUKETON NORTH OPERATIONS
Duketon North Operations (“DNO”) comprises the Moolart Well, Gloster, Dogbolter, Petra and Anchor pits with all ore
processed through the Moolart Well processing plant.
Operating results for the year to 30 June 2017 were as follows:
Ore mined
Waste mined
Stripping ratio
Ore mined
Ore milled
Head grade
Recovery
Gold production
Cash cost
Cash cost inc royalty
All in Sustaining Cost
Mbcm
Mbcm
w:o
Mt
Mt
g/t
%
koz’s
A$/oz
A$/oz
A$/oz
2017
1.74
7.77
4.5
3.37
2.95
1.14
94
101
621
697
785
2016
1.49
5.77
3.9
2.98
2.92
0.90
91
76
706
778
934
Annual production for FY2017 at DNO was 100,875 ounces at a cash cost of $621 per ounce and an all in sustaining
cost of $785 per ounce. Production at DNO increased by 32% from the previous year due to the commencement of
mining operations at the Gloster satellite deposit in October 2016. Gloster ore is hauled approximately 26 kilometres
by road train to the processing facility at Moolart Well where it is blended with ore from that operation. The ore from
Gloster milled during 2017 was of a higher grade and softer, oxide material than the ore available from Moolart Well.
As a result the head grade at DNO increased by 27% and mill throughput improved slightly from the previous year
even though Gloster contributed to production for only 9 months of the year.
AISC for DNO dropped 16% on the back of the increased gold production and despite the higher strip ratio incurred
in starting up operations at Gloster.
REGIS RESOURCES // 2017 ANNUAL REPORT
DUKETON SOUTH OPERATIONS
10
The Duketon South Operations (“DSO”) includes the Garden Well, Rosemont, Erlistoun, Baneygo and other satellite
projects in proximity to the Garden Well processing plant.
Operating results for the year to 30 June 2017 were as follows:
Ore mined
Waste mined
Stripping ratio
Ore mined
Ore milled
Head grade
Recovery
Gold production
Cash cost
Cash cost inc royalty
All in Sustaining Cost
Mbcm
Mbcm
w:o
Mt
Mt
g/t
%
koz’s
A$/oz
A$/oz
A$/oz
2017
2.82
17.78
6.3
7.48
6.83
1.10
93
223
867
940
1,017
2016
3.15
16.85
5.4
7.81
7.34
1.08
90
229
795
867
924
Production at DSO for the year was 223,478 ounces of gold at an all-in sustaining cost of $1,017 per ounce. Gold
production was slightly lower than the previous year due to a 7% reduction in mill throughput as a result of the
Rosemont operation transitioning to harder, fresh ore during the year. Mining of softer oxide material in the Rosemont
southern extension commenced towards the end of the year resulting in improved throughput.
Mining at the Erlistoun satellite project commenced in December 2016 with ore carted to the Garden Well processing
plant (8 kilometres to the north). Ore supply from Erlistoun, whilst contributing positively to DSO grade, was
continuous but in modest tonnages as the open cut advances to main ore zones. The contribution from Erlistoun is
expected to improve in FY2018 as operations move towards steady state and ore supply becomes continuous.
AISC was up 10% on the prior year as a result of high, start up strip ratios at Erlistoun and the Rosemont southern
extension.
FY2018 GUIDANCE
With a full year of production expected from the Gloster and Erlistoun satellite deposits, Regis is expecting production
at Duketon to increase in FY2018. Gold production and operating costs for FY2018 are expected to be in the following
ranges:
Gold production:
335,000 – 365,000 ounces
Cash costs, including royalties: $770 – 840 per ounce
All in Sustaining Cost:
$940 – 1,010 per ounce
)
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GOLD
EXPLORATION
Duketon Gold Project
11
Regis controls a significant tenement package, encompassing 192 granted exploration, prospecting and mining
licences covering 1,031 square kilometres and 38 miscellaneous licences covering 427 square kilometres at the
Duketon Gold Project.
Regis’ exploration effort in recent years has been successful in extending the reserve base of the Company and
replacing annual production. The successful replenishment and extension of Reserves is reflective of the advantage
the significant tenure position on prospective geology and the proximity to the 10Mtpa milling capacity provides at
Duketon.
Duketon Gold Reserves 2009-2017
3,000
2,500
2,000
1,500
1,000
500
0
-500
-1,000
-1,500
’
)
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0
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3.4Moz
2.2Moz
0.6Moz
2009 Reserve
Mining Depletion
Discovery
Current Reserves
1.9Moz
REGIS RESOURCES // 2017 ANNUAL REPORT
Significant exploration projects advanced during the year ended 30 June 2017 are outlined below.
announced a maiden Ore Reserve of 7.1MT at 1.61g/t Au for 366,000 ounces of gold at a 0.5g/t
Au lower cut.
Tooheys Well
12
The Tooheys Well gold project is 100% owned and located on a granted mining lease, 2.5 kilometres south of the
Gold mineralisation has been defined in two north-south trending Western and Eastern shear
Garden Well gold mine. In June 2017, after extensive drilling, Regis announced a maiden Ore Reserve of 7.1MT at 1.61g/t
zones 100 metres apart hosted in Banded Iron Formation (BIF), chert and fine grained sediments.
Au for 366,000 ounces of gold at a 0.5g/t Au lower cut.
The eastern shear zone mineralisation appears to have a steep dip of 80-90ᵒ to the east. Host
Gold mineralisation has been defined in two north-south trending Western and Eastern shear zones 100 metres apart
rocks are BIF/chert and shale and weathering extends to 80 to 100 metres vertical depth. Gold
hosted in Banded Iron Formation (BIF), chert and fine grained sediments. The eastern shear zone mineralisation
appears to have a steep dip of 80-90˚ to the east. Host rocks are BIF/chert and shale and weathering extends to 80
mineralisation is associated with pyrrhotite hosted in BIF which appears to be the dominant
to 100 metres vertical depth. Gold mineralisation is associated with pyrrhotite hosted in BIF which appears to be the
lithology at Tooheys Well. The pyrrhotite phase is restricted to BIFs and has replaced magnetite
dominant lithology at Tooheys Well. The pyrrhotite phase is restricted to BIFs and has replaced magnetite during
during hydrothermal alteration.
hydrothermal alteration.
It is planned that open cut mining will provide a supplementary higher-grade ore supply for the existing Garden Well
It is planned that open cut mining will provide a supplementary higher-grade ore supply for the
processing plant. Mining is expected to commence in the March 2018 quarter (subject to final statutory approvals)
existing Garden Well processing plant. Mining is expected to commence in the March 2018
with ore haulage and gold production to follow in the December 2018 quarter. Utilisation of Regis’ 5Mtpa Garden Well
quarter (subject to final statutory approvals) with ore haulage and gold production to follow in the
processing plant will see Tooheys Well produce in the order of 90,000 ounces of gold per annum over the life of the
mine, displacing lower grade ore from Garden Well from the mill.
December 2018 quarter. Utilisation of Regis’ 5Mtpa Garden Well processing plant will see
Tooheys Well produce in the order of 90,000 ounces of gold per annum over the life of the mine,
displacing lower grade ore from Garden Well from the mill.
Rosemont Underground Resource Drilling
An RC drill programme was undertaken during the current year to test for underground
mineralisation at Rosemont South and below the centre of the Main Pit where numerous high
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Rosemont Underground Resource Drilling
An RC drill programme was undertaken during the current year to test for underground mineralisation at Rosemont
grade intercepts were recorded during exploration and resource development programmes prior
South and below the centre of the Main Pit where numerous high grade intercepts were recorded during exploration
to mining. This programme also leveraged off the knowledge of structural orientation and
and resource development programmes prior to mining. This programme also leveraged off the knowledge of
controls over high grade zones of mineralisation seen in grade control drilling in the open pit
structural orientation and controls over high grade zones of mineralisation seen in grade control drilling in the open
pit workings immediately above the targeted underground areas.
workings immediately above the targeted underground areas.
13
Drilling has been conducted from within the open pit mine, considerably shortening the depth of
Drilling has been conducted from within the
open pit mine, considerably shortening the
holes required to test high grade shoots 100-200 metres vertically below the final pit design
depth of holes required to test high grade
depth. Shorter holes also allow the use of RC rigs rather than diamond drill rigs however the
shoots 100-200 metres vertically below the
drilling activities must fit within mining operations and as a result, the drill programme has
final pit design depth. Shorter holes also
extended beyond the end of the current year.
allow the use of RC rigs rather than diamond
drill rigs however the drilling activities must
fit within mining operations and as a result,
Early holes drilled to date are encouraging for underground opportunities across the deposit.
the drill programme has extended beyond
Drilling will continue in FY2018 with a focus on establishing continuity and geometry of high grade
the end of the current year.
mineralisation. A programme of diamond drilling will commence shortly to both verify existing RC
derived high grade intercepts and to also gain structural and geotechnical information.
Early holes drilled to date are encouraging
for underground opportunities across the
deposit. Drilling will continue in FY2018
with a focus on establishing continuity and
geometry of high grade mineralisation.
A programme of diamond drilling will
commence shortly to both verify existing
RC derived high grade intercepts and
to also gain structural and geotechnical
information.
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REGIS RESOURCES // 2017 ANNUAL REPORT
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On completion of these programmes, it is anticipated Regis will be in a position to estimate a maiden underground
resource in relation to the initial areas drilled to date below and to the south of Rosemont Main Pit.
Duketon Gold Exploration Joint Venture
Lag sampling and air core drilling programmes were completed on a number of prospects in the Duketon Gold
Exploration Joint Venture during the current year, including Petra North, Hack Bore, Commonwealth, Bella Well and
Bandya. Regis has met its joint venture expenditure obligations to spend at least $1 million over a 2 year period to
earn a 75% interest in any mining project that is confirmed by a Regis decision to mine. The 2 year term expires in
October 2017 and without finding any significant targets for further follow up, limited future work is planned.
Duketon Reserve Growth
The aggressive exploration programme at the Duketon project continues to focus on high potential areas for Mineral
Resource expansions with a view to delivering further extensions to the mine life of the current operations. The
Company successfully added to the Duketon resource and reserve base when it released the annual resources and
reserves update in July 2017. Duketon Ore Reserves increased by 18% from 2.13 million ounces to 2.18 million ounces
after accounting for mining depletion of 331,000 ounces. Duketon Mineral Resources increased from 5.80 million
ounces to 5.85 million ounces.
The change in the Duketon Ore Reserve from March 2016 to March 2017 is as follows:
31 March 2016
Depleted by Mining to 31 March 2017
31 March 2016 Net of Depletion
31 March 2017
% Variation net of Depletion
TOTAL ORE RESERVE
TONNES
(Mt)
GOLD GRADE
(g/t)
GOLD METAL
(koz)
60.8
-9.6
51.2
59.3
13%
1.09
1.07
1.09
1.14
2,125
-331
1,794
2,182
18%
The major contributors to the increase of 388,000 ounces in Ore Reserves net of depletion were:
Maiden Ore Reserve of 366,000 ounces at Tooheys Well; and
Addition of 52,000 ounces at Gloster and 12,000 ounces at Erlistoun through extensional drilling and improved
optimisations.
McPhillamys Gold Project
The 100% Regis owned McPhillamys Gold Project is one of Australia’s larger undeveloped open
McPhillamys Gold Project
pittable gold resources. The project is located approximately 250 kilometres west of Sydney in
The 100% Regis owned McPhillamys Gold Project is one of Australia’s larger undeveloped open pittable gold resources.
Central West NSW, a well-established mining district.
The project is located approximately 250 kilometres west of Sydney in Central West NSW, a well-established mining
district.
15
An RC and diamond drill programme was completed during the year (153 holes for 45,411 metres) with the aim being
to infill the current drill pattern to a nominal 50m x 25m spacing for an updated Mineral Resource Estimate (MRE) and
was used as a basis for the maiden reserve estimation.
An RC and diamond drill programme was completed during the year (153 holes for 45,411 metres)
with the aim being to infill the current drill pattern to a nominal 50m x 25m spacing for an updated
Mineral Resource Estimate (MRE) and was used as a basis for the maiden reserve estimation.
12
REGIS RESOURCES // 2017 ANNUAL REPORT
A cross section of the McPhillamys gold deposit is shown below:
A cross section of the McPhillamys gold deposit
Significant McPhillamys drill hole results in plan view
A cross section of the McPhillamys gold deposit is shown below:
Subsequent to the end of the year, the Company announced a maiden ore Reserve estimate at McPhillamys of 60.1
million tonnes at 1.05g/t for 2,034,000 ounces of gold. A pre-feasibility study completed in conjunction with the
Reserve estimate shows the project supports a large scale open pit gold mine. The project will be developed as
a 7 million tonne per annum mining and processing operation with gold production averaging 192,000 ounces per
annum over a nine year mine life. The capital cost of development is estimated at $215 million with life of mine all in
sustaining cost of operation forecast to be $990 per ounce. At a $1,600 per ounce gold price, the project has a pre-tax,
post capex net present value of $525 million.
Key life of mine physical results from the study, at a processing throughput of 7Mtpa, are summarised below:
13
MINING
Waste volume (BCM millions)
Ore volume (BCM millions)
Volume total (BCM millions)
W:O Strip Ratio
MILLING
Dry Tonnes Per Hour
Plant Availability
Ore Milled (Tonnes millions)
Milled Grade (g/t)
Recovery
Ounces Recovered
Mine life (years)
91.6
21.3
112.9
4.29
841
95.0%
60.1
1.05
85.0%
1,728,264
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Life of mine gold production is shown below:
Annual Gold Production and Milled Grade
Ounces Recovered
Milled Grade (g/t)
250
200
’
)
s
0
0
0
(
s
e
c
n
u
O
150
100
50
0
1
2
3
4
5
6
7
8
9
17
u
A
t
/
g
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
1.01
0.93
0.95
0.94
0.90
177,647
181,016
210,461
210,877
179,298
192,720
224,493
142,688
209,062
As part of advancing the development of the McPhillamys Gold Project, Regis announced in July
Ounces
2017 that it was progressing two long term water supply options for the project. The first option is
Recovered
Milled
a non-binding heads of agreement with Centennial Coal Company Limited (“Centennial”) and
Grade (g/t)
Energy Australia Pty Ltd (“EA”) for Regis to utilise water from the Mt Piper Power Station and
Springvale Mine near Lithgow. The parties to the non-binding heads of agreement are proceeding
As part of advancing the development of the McPhillamys Gold Project, Regis announced in July 2017 that it was
progressing two long term water supply options for the project. The first option is a non-binding heads of agreement
to work towards finalising a binding agreement as soon as possible with completion targeted for
with Centennial Coal Company Limited (“Centennial”) and Energy Australia Pty Ltd (“EA”) for Regis to utilise water from
the September 2017 quarter.
the Mt Piper Power Station and Springvale Mine near Lithgow. The parties to the non-binding heads of agreement
are proceeding to work towards finalising a binding agreement as soon as possible with completion targeted for the
Concurrent with progressing the above water supply agreement, Regis has contractually secured
September 2017 quarter.
approximately 4.5GLpa of water through long term lease and acquisition of Water Access
Concurrent with progressing the above water supply agreement, Regis has contractually secured approximately
Licenses over ground water allocations in a zone of the Lachlan catchment approximately 80
4.5GLpa of water through long term lease and acquisition of Water Access Licenses over ground water allocations in
kilometres from McPhillamys.
a zone of the Lachlan catchment approximately 80 kilometres from McPhillamys.
1.09
1.46
1.10
1.17
A definitive feasibility study (DFS) into the development of the project is expected to be completed
in the December 2017 quarter. Subject to the completion of the DFS the following development
timetable is targeted:
15
REGIS RESOURCES // 2017 ANNUAL REPORT
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Garden Well processing plant // Photo by Christine Darbyshire
A definitive feasibility study (DFS) into the development of the project is expected to be completed in the December
2017 quarter. Subject to the completion of the DFS the following development timetable is targeted:
Submission of permitting applications – March 2018 quarter
Commencement of construction – December 2018 quarter
First gold production – December 2019 quarter
Acquisition of the Blayney Gold Project
During the year, Regis executed an agreement to acquire an Exploration License located immediately west of the
McPhillamys project license. The Exploration License, referred to as the Blayney Gold Project, covers 493 square
kilometres and hosts two gold deposits.
Regis paid the acquisition cost of $3.25 million in cash on completion of the transaction.
The Blayney Gold Project is reported under the JORC Code 2004, to host Mineral Resources at two gold deposits.
Discovery Ridge has an Indicated and Inferred MRE of 13.84MT at 1.1g/t Au for 501,000 ounces and Bald Hill has an
Inferred MRE of 37.0MT at 0.5g/t Au for 595,000 ounces.
Discovery Ridge is a shear hosted gold deposit located in strongly foliated, fine-grained metasediments of the
Ordovician Coombing and Adaminaby Formations. Regis believes the deposit has the potential to augment its
McPhillamys Gold Project. It appears to be a robust resource and is located 32 kilometres away by major highway.
The Company intends to study the deposit with a view to generating a satellite open pit operation to be developed
contemporaneously with the McPhillamys project.
To that end, a 6,000 metre infill drilling programme consisting of RC and diamond drilling is planned to commence
at Discovery Ridge early in the first half of the 2018 financial year. The programme is aimed at providing enough
information to allow the estimation of a maiden reserve at Discovery Ridge.
GROUP MINERAL RESERVES As at 31 March 2017
PROJECT
TYPE
CUT-OFF
(g/t)²
TONNES
(Mt)
GOLD
GRADE
(g/t)
GOLD
METAL
(koz)
TONNES
(Mt)
GOLD
GRADE
(g/t)
GOLD
METAL
(koz)
TONNES
(Mt)
GOLD
GRADE
(g/t)
GOLD
METAL
(koz)
COMPETENT
PERSON
PROVED
PROBABLE
TOTAL ORE RESERVE
19
Moolart Well
Open-Pit
Open-Pit
Open-Pit
> 0.4
> 0.4
> 0.4
1.8
6.1
1.9
0.98
0.76
1.53
57
149
92
1.0
0.82
17.6
7.8
0.92
1.40
27
520
350
2.8
0.92
23.7
0.88
9.7
1.42
83
669
442
Sub Total
9.7
0.95
298
26.4
1.06
897
36.1
1.03
1,195
Garden Well
Rosemont
Duketon Main
Deposits
Tooheys Well
Open-Pit
Gloster
Erlistoun
Baneygo
Petra
Dogbolter
Anchor
Open-Pit
Open-Pit
Open-Pit
Open-Pit
Open-Pit
Open-Pit
> 0.5
> 0.5
> 0.5
> 0.4
> 0.5
> 0.5
> 0.5
-
-
0.2
0.85
-
-
-
-
-
-
-
-
-
-
Duketon Satellite
Deposits
Sub Total
0.2
0.85
McPhillamys
Open-Pit
> 0.4
-
-
-
6
-
-
-
-
-
6
-
7.1
7.1
4.1
3.6
0.6
0.3
0.1
1.61
1.06
1.43
1.16
1.26
1.57
2.07
366
243
190
136
25
16
6
7.1
7.3
4.1
3.6
0.6
0.3
0.1
1.61
1.05
1.43
1.16
1.26
1.57
2.07
366
248
190
136
25
16
6
23.0
1.33
981
23.2
1.32
987
60.1
1.05
2,034
60.1
1.05
2,034
Regis
Grand Total
10.0
0.95
304
109.5
1.11
3,912
119.4
1.10
4,216
D
D
D
D
D
D
D
D
D
D
D
GROUP MINERAL RESOURCES As at 31 March 2017
GOLD
MEASURED
INDICATED
INFERRED
TOTAL RESOURCE
PROJECT
TYPE
CUT-
OFF
(g/t)
TONNES
(Mt)
GOLD
GRADE
(g/t)
GOLD
METAL
(koz)
TONNES
(Mt)
GOLD
GRADE
(g/t)
GOLD
METAL
(koz)
TONNES
(Mt)
GOLD
GRADE
(g/t)
GOLD
METAL
(koz)
TONNES
(Mt)
GOLD
GRADE
(g/t)
GOLD
METAL
(koz)
COMPETENT
PERSON
Moolart Well
Open-Pit
Garden Well
Open-Pit
Rosemont
Open-Pit
0.4
0.4
0.4
5.2
6.8
2.4
0.87
0.76
1.45
144
164
111
17.1
0.70
384
12.2
0.71
52.5
0.83
1,401
10.8
0.78
20.5
1.30
858
1.8
1.72
278
271
97
34.5
0.73
806
70.1
0.82
1,837
24.7
1.34
1,066
Duketon Main
Deposits
Sub Total
14.3
0.91
420
90.2
0.91
2,643
24.7
0.81
646
129.2
0.89 3,709
Tooheys Well
Open-Pit
Gloster
Open-Pit
Baneygo
Open-Pit
Erlistoun
Open-Pit
Dogbolter
Open-Pit
Russells Find
Open-Pit
Petra
Open-Pit
King John
Open-Pit
Reichelts Find
Open-Pit
Anchor
Open-Pit
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
-
-
0.2
0.85
-
-
0.0
0.95
-
-
-
-
-
-
-
-
-
-
-
-
-
6
-
0
-
-
-
-
-
-
15.9
1.17
15.0
0.83
9.2
6.0
3.5
2.1
1.2
-
-
0.96
1.31
1.11
1.07
1.08
-
-
0.2
1.75
598
399
283
253
128
71
42
-
-
9
1.1
6.1
1.9
0.8
0.5
0.3
0.1
0.8
0.8
0.1
0.89
31
17.0
1.16
630
0.66
129
21.3
0.78
534
0.95
1.05
1.02
0.90
1.09
1.56
1.11
0.95
57
28
16
10
2
42
28
2
11.1
0.96
340
6.9
4.0
2.4
1.3
0.8
0.8
0.2
1.28
1.10
1.05
1.08
1.56
1.11
1.53
282
144
81
44
42
28
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Duketon
Satellite
Deposits
Duketon
Sub Total
0.2
0.85
6
53.0
1.05
1,784
12.5
0.86
346
65.7
1.01
2,136
Total
14.5
0.91
426
143.1
0.96
4,427
37.2
0.83
991
194.9
0.93
5,845
McPhillamys
Total
0.4
-
-
-
67.7
1.05
2,282
1.2
0.64 25.46
68.9
1.04
2,307
Regis
Grand Total
14.5
0.91
426
210.9
0.99 6,709
38.4
0.82
1,017
263.8
0.96 8,152
A
A
A
A
A
A
A
A
A
A
A
A
A
A
REGIS RESOURCES // 2017 ANNUAL REPORT Garden Well Open Pit // Photo by Sarah Parfett
Directors'
Report
DIRECTORS'
REPORT
21
Your directors submit their report for the year ended 30 June 2017.
DIRECTORS
The directors of the Company in office since 1 July 2016 and up to the date of this report are:
Mr Mark Clark, B.Bus CA
(Executive Chairman)
Mr Clark has over 26 years of experience in corporate advisory and public company management. He was appointed
to the board of Regis Resources Limited in May 2009 in the role of Managing Director. Mr Clark assumed the role of
Executive Chairman at Regis immediately after the company’s AGM on 12 November 2015. Prior to joining Regis, Mr
Clark was the Managing Director of Equigold NL.
He joined Equigold in 1995 and originally held the roles of Chief Financial Officer and was responsible for the
financial, administration and legal functions of the company. He was closely involved in the development and
operation of Equigold’s projects in both Australia and Ivory Coast. He was a director of Equigold from April 2003
and was Managing Director from December 2005 until Equigold’s merger with Lihir Gold Limited in June 2008. Prior
to working at Equigold Mr Clark held a senior position at an international advisory firm, providing financial and
corporate advice to clients in the mining industry.
During the past three years, Mr Clark has not served as a director of any other ASX listed companies.
Mr Clark is a member of the Institute of Chartered Accountants in Australia.
Mr Paul Thomas, BAppSc (extmet) GAICD
(Executive Director)
Mr Thomas joined Regis in March 2014 in the role of Chief Operating Officer (COO) and was appointed to the board
immediately following the company’s AGM on 12 November 2015. Mr Thomas is a qualified metallurgist with extensive
operating and development experience gained in a career of over 30 years in the mining industry. During this time,
he has held a number of senior operations management and executive roles within Australian listed gold and base
metal mining companies.
Mr Thomas has various regulatory and technical qualifications in mining, processing, management and finance
including a Diploma in Open Cut and Underground Mining, a Diploma of Business and a Graduate Diploma of Applied
Finance and Investment. He is a Graduate Member of the Australian Institute of Company Directors.
During the past three years, Mr Thomas has not served as a director of any other ASX listed companies.
REGIS RESOURCES // 2017 ANNUAL REPORT Mr Mark Okeby, LLM
(Deputy Chairman/Lead Independent Non-Executive Director)
22
Mr Okeby has considerable experience in the resources industry as a solicitor and as a director of listed companies.
He has been an executive and non-executive director of a number of gold producers and other resource companies
and has been involved in the development of a number of resource projects and with mergers and acquisitions in
the resource sector.
Mr Okeby was appointed Deputy Chairman/Lead Independent Director immediately after the company’s AGM on 12
November 2015 and assumes the responsibilities of Chairman in the event of the unavailability of Mr Clark at any time
or in relation to any matter in which Mr Clark may be conflicted.
Mr Okeby is currently a non-executive director of Red Hill Iron Limited and, during the past three years, has not
served as a director of any other ASX listed companies.
Mr Ross Kestel, B.Bus, CA, MAICD
(Independent Non-Executive Director)
Mr Kestel is a Chartered Accountant and was a director of a mid-tier accounting practice for over 26 years and
has a strong corporate and finance background. He has acted as a director and company secretary of a number of
public companies involved in mineral exploration, mining, mine services, property development, manufacturing and
technology industries.
During the past three years he has also served as a non-executive director of Beadell Resources Limited (from
February 2012 to November 2015).
Mr Kestel is a member of the Australian Institute of Company Directors.
Mr James Mactier, BAgrEc, GradDipAppFin GAICD
(Independent Non-Executive Director)
Mr Mactier was joint head of the Metals and Energy Capital Division of Macquarie Bank Limited for fifteen years
until his retirement in April 2015. He has wide ranging experience in project and corporate finance, resource project
assessment, equity investing, commodity and currency hedging and trading in the metals and energy sectors globally.
He is a Graduate Member of the Australian Institute of Company Directors.
During the past three years, Mr Mactier has not served as a director of any other ASX listed company.
Ms Fiona Morgan, CPEng, BE(Hons), FIEAust, GAICD
(Independent Non-Executive Director – appointed 18 November 2016)
Ms Morgan is a Chartered Professional Engineer with over 23 years’ experience in the mining industry, including
working on gold, nickel, coal and iron ore projects. Ms Morgan is the Managing Director and Chief Executive Officer
of Mintrex Pty Ltd, a highly regarded and longstanding consulting engineering company which has successfully
undertaken a broad suite of technical services to Australian and international clients developing resource projects.
She has a wide range of experience in operations and project management, maintenance, research and design of
both underground and surface mining infrastructure.
During the past three years, Ms Morgan has not served as a director of any other ASX listed company.
Fiona is a Fellow of the Institution of Engineers Australian and a graduate member of the Australian Institute of
Company Directors.
Mr Glyn Evans, BAppSc, FAusIMM
(Independent Non-Executive Director – retired 29 July 2016)
Mr Evans is a geologist with over 30 years’ experience in base metal and gold mining operations.
He was an executive director with ASX listed gold mining companies between 1991 and 2007. Mr Evans has a strong
mine geology background, having held senior mine management positions early in his career and then ultimately
managed the gold resources and reserves of both Samantha Gold NL (1987-1994) and Equigold NL (1995-2007). He also
led extensive exploration programmes over his long career which culminated in significant gold discoveries including
the well-known Higginsville and Chalice Mines in Western Australia and the Bonikro mine in the Ivory Coast.
Mr Evans retired as non-executive director on 29 July 2016.
During the past three years, Mr Evans has not served as a director of any other ASX listed companies.
Mr Evans is a Fellow of the Australian Institute of Mining and Metallurgy.
REGIS RESOURCES // DIRECTORS' REPORT (continued) COMPANY SECRETARY
Mr Kim Massey, B.Com, CA
Mr Massey is a Chartered Accountant with significant experience in financial management and corporate advisory
services, particularly in the resources sector, as a corporate advisor and company secretary for a number of ASX
and AIM listed companies.
23
DIVIDENDS
After the balance sheet date the following dividends were proposed by the directors:
Final dividends recommended:
Ordinary shares
CENTS PER
SHARE
TOTAL
AMOUNT
$’000
8.00
40,143
The financial effect of these dividends has not been brought to account in the consolidated financial statements for
the year ended 30 June 2017 and will be recognised in subsequent financial reports.
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
The principal activities of Regis Resources Limited (“Regis” or the “Company”) and its controlled entities (collectively,
the “Group”) during the year were:
production of gold from the Duketon Gold Project;
exploration, evaluation and development of gold projects in the Eastern Goldfields of Western Australia; and
exploration and evaluation of the McPhillamys Gold Project in New South Wales.
Apart from the above, or as noted elsewhere in this report, no significant changes in the state of affairs of the
Company occurred during the financial year.
OBJECTIVES
The Group’s objectives are to:
Continue to optimise mining and processing operations across the Duketon Gold Project whilst maintaining a high
standard of safety;
Maximise cash flow by this process of optimisation and the blending of ore feed from satellite resources across
the Duketon tenure;
Organically increase the Reserve base of the Group by discovering and developing satellite resource positions,
extending the reserve base of existing operating deposits;
Focus on regional exploration to add incremental ounces and mine life to the three operating mills in the district;
Advance the economic study of the McPhillamys Gold Project in NSW with a view to developing a significant long
life gold mine at the project;
Return value to shareholders through a commitment to dividends; and
Actively pursue inorganic growth opportunities.
REGIS RESOURCES // 2017 ANNUAL REPORT OPERATING AND FINANCIAL REVIEW
24
Overview of the Group
Regis is a leading Australian gold producer, with its head office in Perth, Western Australia. The Company operates
within two distinct project areas at the Duketon Gold Project in the Eastern Goldfields of Western Australia. The
Duketon North Operations (DNO) comprises the Moolart Well Gold Mine and the Gloster Gold Mine. The Duketon
South Operations contains the Garden Well Gold Mine, the Rosemont Gold Mine and the Erlistoun Gold Mine.
The Group also owns the McPhillamys Gold Project, an advanced exploration project in New South Wales, 250
kilometres west of Sydney near the town of Bathurst.
Financial Summary
KEY FINANCIAL DATA
Financial results
Sales revenue
2017
$’000
2016
CHANGE
CHANGE
$’000
$’000
%
542,218
500,152
42,066
Cost of sales (excluding D&A)(i)
(278,374)
(260,047)
(18,327)
Other income
Corporate, admin and other costs
EBITDA(i)
Depreciation and amortisation (D&A)
Profit before tax
Income tax expense
Reported profit after tax
Other financial information
Cash flow from operating activities
Net cash
Net assets
4,962
6,294
(15,504)
(12,007)
253,302
234,392
(57,581)
(75,244)
196,137
159,101
(1,332)
(3,497)
18,910
17,663
37,036
(57,974)
(47,308)
(10,666)
138,163
111,793
26,370
206,082
204,001
117,081
96,925
2,081
20,156
538,392
481,848
56,544
Basic earnings per share (cents per share)
27.59
22.37
5.22
8.4%
7.0%
(21.2%)
29.1%
8.1%
(23.5%)
23.3%
22.5%
23.6%
1.0%
20.8%
11.7%
23.3%
(i) EBITDA is an adjusted measure of earnings before interest, taxes, depreciation and amortisation. Cost of sales (excluding D&A) and EBITDA
are non-IFRS financial information and are not subject to audit. These measures are included to assist investors to better understand the
performance of the business
Performance relative to the previous financial year
Regis achieved a 24% increase in net profit after tax for the current year in comparison to the prior year result of
$111.8 million. This result is a reflection of the continued successful expansion of the Company’s Duketon Gold
Project. Operations commenced at two new satellite deposits during the period which had a positive impact on
production while costs remained very competitive. The expanded life of mine reserve footprint at the Duketon Gold
Project has reduced the impact of depreciation and amortisation expense on net profit by 24%.
Sales
The Company achieved record gold production for the year ended 30 June 2017 of 324,353 ounces which translated
into an increase of 8.4% in gold sales revenue. Total sales exceeded the prior year in terms of both volume and price
with 322,355 ounces of gold sold at an average price of $1,682 per ounce in 2017 (2016: 310,676 ounces at $1,610 per
ounce). The Company delivered gold produced into a combination of spot deferred contracts and the prevailing spot
price. The total hedging position at the end of the year was 396,406 ounces of spot deferred contracts with an average
delivery price of $1,551 per ounce (2016: 433,770 ounces comprising 80,000 ounces of flat forward contracts with a
delivery price of $1,454 per ounce and 353,770 ounces of spot deferred contracts with a weighted average forward
price of $1,581 per ounce).
REGIS RESOURCES // DIRECTORS' REPORT (continued) Cost of Sales
Costs of sales including royalties, but before depreciation and amortisation increased marginally (7%) due to the
higher start up strip ratios associated with the commencement of mining at the new satellite projects. Mining volumes
were up 10% compared to the previous year as Gloster and Erlistoun were brought into production. The satellite
projects contributed a higher grade ore feed which meant costs on a per ounce basis increased to a lesser extent.
25
Depreciation and Amortisation
The expansion of the Duketon reserves at both the northern and southern operations has resulted in a decrease in
the depreciation and amortisation expense for the year by 23.5% over the prior year as the value of capitalised assets
is realised over a comparatively longer period.
Cash Flow from Operating Activities
Cash flow from operating activities continued to be strong in 2017 at $206.1 million. This represented only a modest
increase on the prior year as the Group’s improved profitability lead to the payment of $36.2 million of income taxes,
up 58% on the prior year.
The Company continued to provide strong returns to shareholders through the payment of two fully franked dividends
in 2017 totalling $80.1 million.
Duketon North Operations (“DNO”)
Operating results for the 12 months to 30 June 2017 were as follows:
Ore mined
Waste mined
Strip ratio
Ore mined
Ore milled
Head grade
Recovery
Gold production
Cash cost per ounce – pre royalties
Cash cost per ounce – incl. royalties
All-in Sustaining Cost (“AISC”)
30 JUNE 2017
30 JUNE 2016
BCM
BCM
w:o
1,742,903
1,486,071
7,768,536
5,768,217
4.5
3.9
Tonnes
3,368,392
2,981,095
Tonnes
2,950,400
2,916,006
g/t
%
1.14
94
0.90
91
Ounces
100,875
76,139
A$/oz
A$/oz
A$/oz
$621
$697
$785
$706
$778
$934
Gold production at DNO was up 32% on the prior year as a result of the commencement of mining operations at
the Gloster satellite deposit in October 2016. Gloster ore is hauled approximately 26 kilometres by road train to the
processing facility at Moolart Well where it is blended with ore from that operation. The ore from Gloster milled
during 2017 was of a higher grade and softer, oxide material than the ore available from Moolart Well. As a result
the head grade at DNO increased by 27% and mill throughput improved slightly from the previous year even though
Gloster contributed to production for only 9 months of the year.
AISC for DNO dropped 16% on the back of the increased gold production and despite the higher strip ratio incurred
in starting up operations at Gloster.
REGIS RESOURCES // 2017 ANNUAL REPORT 26
Garden Well Crushing Circuit // Photo by Sarah Parfett
Duketon South Operations (“DSO”)
Operating results at the Duketon South Operations for the 12 months to 30 June 2017 were as follows:
Ore mined
Waste mined
Strip ratio
Ore mined
Ore milled
Head grade
Recovery
Gold production
Cash cost per ounce – pre royalties
Cash cost per ounce – incl. royalties
All-in Sustaining Cost (“AISC”)
30 JUNE 2017
30 JUNE 2016
BCM
BCM
w:o
2,817,291
3,148,056
17,783,273
16,848,858
6.3
5.4
Tonnes
7,481,128
7,805,241
Tonnes
6,830,460
7,336,030
g/t
%
1.10
93
1.08
90
Ounces
223,478
228,945
A$/oz
A$/oz
A$/oz
$867
$940
$1,017
$795
$867
$924
DSO reported a slight increase in head grade of 2% over the prior period and improved recoveries, but a 7% drop
in mill throughput contributed to a 2% drop in gold production. Mill throughput at Rosemont was affected with the
operation transitioning to harder, fresh ore during the year. Mining of softer oxide material in the Rosemont southern
extension commenced towards the end of the year resulting in improved throughput.
Mining at the Erlistoun satellite project commenced in December 2016 and ore was carted to the Garden Well
processing plant (8 kilometres to the north). Ore supply from Erlistoun, whilst contributing positively to DSO grade,
was continuous but in modest tonnages as the open cut advances to main ore zones.
AISC was up 10% on the prior year as a result of high, start up strip ratios at Erlistoun and the Rosemont southern
extension.
REGIS RESOURCES // DIRECTORS' REPORT (continued) Exploration
During the year, a total of 213,008 metres of exploration drilling was completed across the Group’s tenements in
Western Australia and New South Wales. The table below breaks down the drilling activity (in metres) by Prospect:
27
PROSPECT
Tooheys Well
McPhillamys
Rosemont
Hack Bore
Reichelts
Commonwealth
Petra North
Garden Well
Mt Maiden
Gloster
Erlistoun
McKenzie Well
Bella Well
Old Peculiar
Bandya
Beamish
Mourillian
King John
Kintyre
Chert Ridge
Mason Hill
Moolart Well
Total
AIRCORE
RC
DIAMOND
-
-
-
10,526
3,858
9,674
4,506
-
3,192
-
835
3,007
2,932
-
-
797
1,482
-
643
-
172
-
51,254
4,184
42,175
4,330
6,815
708
-
4,396
966
3,932
2,971
-
-
2,887
2,400
1,334
-
1,175
-
522
-
108
-
41,227
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
TOTAL
51,254
45,411
42,175
14,856
10,673
10,382
4,506
4,396
4,158
3,932
3,806
3,007
2,932
2,887
2,400
2,131
1,482
1,175
643
522
172
108
41,624
130,157
41,227
213,008
Significant projects advanced during the year ended 30 June 2017 are outlined below.
All drilling results and resource estimations highlighted in this report are detailed fully in announcements to the ASX
made by the Company throughout the year, along with the associated JORC 2012 disclosures.
Tooheys Well Gold Project
The Tooheys Well gold project is 100% owned and located on a granted mining lease, 2.5 kilometres south of the
Garden Well gold mine. In June 2017, after extensive drilling, Regis announced a maiden Ore Reserve of 7.1MT at 1.61g/t
Au for 366,000 ounces of gold at a 0.5g/t Au lower cut.
Gold mineralisation has been defined in two north-south trending Western and Eastern shear zones 100 metres apart
hosted in Banded Iron Formation (BIF), chert and fine grained sediments. The eastern shear zone mineralisation
appears to have a steep dip of 80-90˚ to the east. Host rocks are BIF/chert and shale and weathering extends to 80
to 100 metres vertical depth. Gold mineralisation is associated with pyrrhotite hosted in BIF which appears to be the
dominant lithology at Tooheys Well. The pyrrhotite phase is restricted to BIFs and has replaced magnetite during
hydrothermal alteration.
It is planned that open cut mining will provide a supplementary higher-grade ore supply for the existing Garden Well
processing plant. Mining is expected to commence in the March 2018 quarter (subject to final statutory approvals)
with ore haulage and gold production to follow in the December 2018 quarter. Utilisation of Regis’ 5Mtpa Garden Well
processing plant will see Tooheys Well produce in the order of 90,000 ounces of gold per annum over the life of the
mine, displacing lower grade ore from Garden Well from the mill.
REGIS RESOURCES // 2017 ANNUAL REPORT 28
Rosemont Main Pit Underground Resource Drilling
An RC drill programme was undertaken during the current year to test for underground mineralisation below the centre
of the Main Pit where numerous high grade intercepts were recorded during exploration and resource development
programmes prior to mining. This programme also leveraged off the knowledge of structural orientation and controls
over high grade zones of mineralisation seen in grade control drilling in the open pit workings immediately above the
targeted underground areas.
Drilling has been conducted from within the open pit mine, considerably shortening the depth of holes required to
test 100-200 metres vertically below the final pit design depth. Shorter holes also allow the use of RC rigs rather than
diamond drill rigs however the drilling activities must fit within mining operations and as a result, the drill programme
has extended beyond the end of the current year. In addition, Regis will shortly commence diamond drilling at
Rosemont to both verify existing RC derived high grade intercepts and to also gain structural and geotechnical
information.
On completion of the first phase of the diamond drilling programme, it is anticipated Regis will be in a position to
estimate a maiden underground resource in relation to the initial areas drilled to date below and to the south of
Rosemont Main Pit.
Reichelts Find
The Reichelts Find project is located 12 kilometres south of the Garden Well gold mine. Prior production is believed
to have included small scale underground mining between 1912 and 1939 and a small oxide open pit operated by
Ashton Mining in the late 1980’s. Gold mineralisation at Reichelts Find is hosted by a strongly sheared ultramafic-
mafic-sediment package. Locally, gold is hosted by quartz veins and surrounding localised shear zones. Current JORC
2012 resources, reported at a 0.4g/t Au cut-off grade, are 0.8MT at 1.11g/t Au for 28,000 ounces.
A first pass RC drill programme of 88 holes for 6,815 metres has been completed to target mineralisation below the
existing pit for both open pit and high-grade underground resources. A wide spaced air core programme targeting
extensions of gold mineralisation north of Reichelts Find was also completed during the year and returned anomalous
intercepts. The results of both programmes will be reviewed and followed up with further drilling in due course.
Duketon Gold Exploration Joint Venture
Lag sampling and air core drilling programmes were completed on a number of prospects in the Duketon Gold
Exploration Joint Venture during the current year, including Petra North, Hack Bore, Commonwealth, Bella Well and
Bandya. The Joint Venture required Regis to spend at least $1 million over a 2 year period to earn a 75% interest in
any mining project that is confirmed by a Regis decision to mine. The 2 year term expires in October 2017 and over
$2 million has been expended to 30 June 2017 without finding any significant targets for further follow up. Limited
work is planned to be undertaken subsequent to year end and as such, all costs incurred have been written off in
the current year.
REGIS RESOURCES // DIRECTORS' REPORT (continued) 29
McPhillamys Drilling // Photo by Tom Ridges
McPhillamys Gold Project NSW
The 100% Regis owned McPhillamys Gold Project is one of Australia’s larger undeveloped open pittable gold resources.
The project is located approximately 250 kilometres west of Sydney in Central West NSW, a well-established mining
district. Regis has reported a mineral resource estimate of 73.2MT at 0.94g/t Au for 2.2Moz at a 0.4g/t Au cut-off grade.
An RC and diamond drill programme was completed during the year (153 holes for 45,411 metres) with the aim being
to infill the current drill pattern to a nominal 50m x 25m spacing for an updated MRE and ultimately to be used as a
basis for reserve estimation. It was also designed to look for high grade extensions to the mineralisation at depth.
Results from the centre of the project have returned large scale +1g intercepts and continue to correlate well with
historic drilling. At year end an RC rig was on site conducting sterilisation drilling for planned infrastructure sites.
Subsequent to the end of the year, Regis announced that it had advanced the development of the McPhillamys Gold
Project by progressing two long term water supply options for the project. The first option is a non-binding heads
of agreement with Centennial Coal Company Limited (“Centennial”) and Energy Australia Pty Ltd (“EA”) for Regis to
utilise water from the Mt Piper Power Station and Springvale Mine near Lithgow. The parties to the non-binding heads
of agreement are proceeding to work towards finalising a binding agreement as soon as possible with completion
targeted for the September 2017 quarter.
Concurrent with progressing the above water supply agreement, Regis has contractually secured approximately
4.5GLpa of water through long term lease and acquisition of Water Access Licenses over ground water allocations in
a zone of the Lachlan catchment approximately 80 kilometres from McPhillamys.
During the current year, significant work was completed towards finalising the Environmental Impact Statement
(“EIS”) for the development of the project. Regis is aiming to submit a Conceptual Project Development Plan (“CPDP”)
to the NSW Department of Planning and Environment (“DPE”) in the September 2017 quarter. This will commence the
approvals process for the development of the project. It is then expected that the EIS will be submitted to the DPE by
the end of the December 2017 quarter.
The Company is undertaking a definitive feasibility study (“DFS”) into the development of a 7Mtpa mining and
processing operation at McPhillamys. The DFS is expected to be completed in the December 2017 quarter.
REGIS RESOURCES // 2017 ANNUAL REPORT Acquisition of the Blayney Gold Project
30
During the year, Regis executed an agreement to acquire an Exploration License located immediately west of the
McPhillamys project license. The Exploration License, referred to as the Blayney Gold Project, covers 493 square
kilometres and hosts two gold deposits.
Regis paid the vendor, Aeris Resources Limited (ASX: AIS), $3.25 million in cash on completion of the transaction.
The Blayney Gold Project is reported, by Aeris Resources Limited under the JORC Code 2004, to host Mineral Resources
at two gold deposits. Discovery Ridge has an Indicated and Inferred MRE of 13.84MT at 1.1g/t Au for 501,000 ounces
and Bald Hill has and Inferred MRE of 37.0MT at 0.5g/t Au for 595,000 ounces.
Discovery Ridge is a shear hosted gold deposit located in strongly foliated, fine-grained metasediments of the
Ordovician Coombing and Adaminaby Formations. Regis believes the deposit has the potential to augment its
McPhillamys Gold Project. It appears to be a robust resource and is located 32 kilometres away by major highway.
The Company intends to study the deposit with a view to generating a satellite open pit operation to be developed
contemporaneously with the McPhillamys project.
To that end, a 6,000 metre infill drilling programme consisting of RC and diamond drilling is planned to commence
at Discovery Ridge early in the first half of the 2018 financial year. The programme is aimed at providing enough
information to allow the estimation of a maiden reserve at Discovery Ridge.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the state of affairs other than those listed in the review of operations
above.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
Option issue
On 5 July 2017, 1,790,000 unlisted employee options were issued under the Regis Resources Employee Share Option
Plan. The options are exercisable on or before 1 July 2021 at an exercise price of $3.90.
Share issue
Subsequent to year end, 762,250 shares have been issued as a result of the exercise of employee options for proceeds
of $234,500.
Dividends
On 28 August 2017, the directors proposed a final dividend on ordinary shares in respect of the 2017 financial year.
Refer to note 6.
Other than the matters discussed above, there has not arisen in the interval between the end of the financial year
and the date of this Report any item, transaction or event of a material and unusual nature which, in the opinion of
the directors of the Group, has significantly affected or is likely to significantly affect:
the operations of the Group;
the results of those operations; or
the state of affairs of the Group
in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
There are no likely developments of which the directors are aware which could be expected to significantly affect
the results of the Group’s operations in subsequent financial years not otherwise disclosed in the Principal Activities
and Operating and Financial Review or the Significant Events after the Balance Date sections of the Directors’ Report.
REGIS RESOURCES // DIRECTORS' REPORT (continued) ENVIRONMENTAL REGULATION AND PERFORMANCE
The operations of the Group are subject to environmental regulation under the laws of the Commonwealth and the
States of Western Australia and New South Wales. The Group holds various environmental licenses issued under
these laws, to regulate its mining and exploration activities in Australia. These licenses include conditions and
regulations in relation to specifying limits on discharges into the air, surface water and groundwater, rehabilitation
of areas disturbed during the course of mining and exploration activities and the storage of hazardous substances.
31
All environmental performance obligations are monitored by the board of directors and subjected from time to time
to Government agency audits and site inspections. There have been no material breaches of the Group’s licenses
and all mining and exploration activities have been undertaken in compliance with the relevant environmental
regulations.
SHARE OPTIONS
Unissued Shares
At the date of this report, the Company had the following unissued shares under listed and unlisted options.
MATURITY DATE
Unlisted options
14 October 2018
11 August 2019
6 January 2020
13 May 2020
1 July 2021
Total
EXERCISE PRICE
NUMBER
OUTSTANDING
$1.55
$1.40
$2.34
$2.70
$3.90
25,000
7,137,500
1,000,000
200,000
1,790,000
10,152,500
Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any
related body corporate.
Details of options granted to directors and other key management personnel during the year are set out in the
remuneration report.
Shares Issued as a Result of the Exercise of Options
During the financial year, employees exercised unlisted options to acquire 1,165,762 fully paid ordinary shares in Regis
Resources Limited at a weighted average exercise price of $2.35 per share.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has entered into an Indemnity Deed with each of the directors which will indemnify them against
liabilities incurred to a third party (not being the Company or any related company) where the liability does not arise
out of negligent conduct including a breach of good faith. The Indemnity Deed will continue to apply for a period of
10 years after a director ceases to hold office. The Company has entered into a Director’s Access and Insurance Deed
with each of the directors pursuant to which a director can request access to copies of documents provided to the
director whilst serving the Company for a period of 10 years after the director ceases to hold office. There are certain
restrictions on the directors’ entitlement to access under the deed. In addition the Company will be obliged to use
reasonable endeavours to obtain and maintain insurance for a former director similar to that which existed at the
time the director ceased to hold office.
The Company has, during or since the end of the financial year, paid an insurance premium in respect of an insurance
policy for the benefit of the directors, secretaries, executive officers and employees of the Company and any related
bodies corporate as defined in the insurance policy. The insurance grants indemnity against liabilities permitted
to be indemnified by the Company under Section 199B of the Corporations Act 2001. In accordance with commercial
practice, the insurance policy prohibits disclosure of the terms of the policy including the nature of the liability
insured against and the amount of the premium.
REGIS RESOURCES // 2017 ANNUAL REPORT DIRECTORS’ MEETINGS
32
The number of directors’ meetings held (including meetings of Committees of the Board) and number of meetings
attended by each of the directors of the Company during the financial year are:
DIRECTORS’ MEETINGS
AUDIT AND RISK
MANAGEMENT COMMITTEE
REMUNERATION,
NOMINATION AND
DIVERSITY COMMITTEE
No. Eligible
to Attend
No.
Attended
No. Eligible
to Attend
No.
Attended
No. Eligible
to Attend
No.
Attended
9
1
9
9
5
9
9
9
1
9
9
5
8
9
n/a
n/a
2
2
n/a
2
n/a
n/a
n/a
2
2
n/a
1
n/a
n/a
n/a
7
7
n/a
7
n/a
n/a
n/a
7
7
n/a
7
n/a
M Clark
G Evans (retired 29 July 2016)
R Kestel
J Mactier
F Morgan (appointed 18 November 2016)
M Okeby
P Thomas
Committee Membership
As at the date of this report, the Company had an Audit and Risk Management Committee and a Remuneration,
Nomination and Diversity Committee of the board of directors.
Members acting on the committees of the board during the year were:
AUDIT AND RISK MANAGEMENT COMMITTEE
REMUNERATION, NOMINATION AND DIVERSITY COMMITTEE
R Kestel (Chairman)
R Kestel (Chairman)
J Mactier
M Okeby
J Mactier
M Okeby
DIRECTORS’ INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY
As at the date of this report, the interests of the directors in the options of the Company were unchanged from the
holdings as at 30 June 2017 as disclosed in the Remuneration Report. The directors’ interests in the shares of the
Company at the date of this report are set out in the table below.
M Clark
R Kestel
J Mactier
F Morgan
M Okeby
P Thomas
NUMBER OF ORDINARY SHARES
2,460,000
75,000
-
513,230
700,000
-
REGIS RESOURCES // DIRECTORS' REPORT (continued) AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
During the year KPMG, the Group auditor, provided the following non-audit services. The directors are satisfied that
the provision of non-audit services is compatible with the general standard of independence for auditors imposed
by the Corporations Act 2001. The nature and scope of each type of non-audit service provided means that auditor
independence was not compromised.
33
KPMG Australia received or are due to receive the following amounts for the provision of non-audit services:
Tax compliance services
IT advisory services
$
6,509
15,888
22,397
A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act is attached
to the Directors’ Report.
ROUNDING OFF
The Company is of a kind referred to in ASIC Instrument 2016/191 dated 24 March 2016 and in accordance with that
Instrument, amounts in the Financial Statements and Directors’ Report have been rounded to the nearest thousand
dollars, unless otherwise stated.
Garden Well Gold Pour // Photo by Sarah Parfett
T
R
O
P
E
R
L
A
U
N
N
A
7
1
0
2
/
/
S
E
C
R
U
O
S
E
R
S
I
G
E
R
Garden Well open pit // Photo by Sarah Parfett
Remuneration
Report (audited)
REMUNERATION
REPORT (AUDITED)
35
This remuneration report for the year ended 30 June 2017 outlines the
remuneration arrangements of the Company and the Group.
This remuneration report for the year ended 30 June 2017 outlines the remuneration arrangements of the Company
and the Group in accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This
information has been audited as required by section 308(3C) of the Act.
The remuneration report details the remuneration arrangements for key management personnel (KMP) who are
defined as those persons having authority and responsibility for planning, directing and controlling the major
activities of the Company and the Group, directly or indirectly, including any director (whether executive or otherwise)
of the parent company.
For the purposes of this report, the term “executive” includes the Executive Chairman, senior executives and company
secretaries of the Parent and the Group.
KEY MANAGEMENT PERSONNEL
Details of KMPs of the Company and Group and their movements during the year ended 30 June 2017 are set out below:
NAME
POSITION
TERM AS KMP
Non-Executive Directors
M Okeby
G Evans
R Kestel
J Mactier
F Morgan
Executive Directors
M Clark
P Thomas
Other Executives
P Woodman
K Massey
Deputy Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Executive Chairman
Executive Director
Full financial year
Retired 29 July 2016
Full financial year
Full financial year
Appointed 18 November 2016
Full financial year
Full financial year
Chief Geological Officer
Full financial year
Chief Financial Officer and Company Secretary
Full financial year
Remuneration
Report (audited)
REGIS RESOURCES // 2017 ANNUAL REPORT PRINCIPLES OF REMUNERATION
36
The Remuneration, Nomination and Diversity Committee is charged with formulating the Group’s remuneration
policy, setting each director’s remuneration and reviewing the Executive Chairman’s remuneration recommendations
for KMPs to ensure compliance with the Remuneration Policy and consistency across the Group. Recommendations
of the Remuneration, Nomination and Diversity Committee are put to the Board for approval.
Remuneration levels for KMP are set to attract, retain and incentivise appropriately qualified and experienced
directors and executives. We reward executives with a level and mix of remuneration appropriate to their position,
responsibilities and performance, in a way that aligns with the business strategy. For the 2017 and subsequent
financial years, the Company has implemented an Executive Remuneration Incentive Plan for executive directors and
other KMPs which sets out the performance hurdles for both Short Term Incentives (“STI”) and Long Term Incentives
(“LTI”) and replaces share options with performance rights as the LTI compensation methodology. Fixed Remuneration
and STI awards are in the form of cash payments.
The objectives and principles of the Company’s remuneration policy include:
To align the objectives of executive directors and other KMP’s with the interests of shareholders and reflect
Company strategy;
To provide competitive rewards to attract, retain and incentivise high calibre executives; and
For total remuneration to include a competitive fixed component and an “at risk” component based on performance
hurdles and key performance indicators.
The STI is the annual component of the “at risk” reward opportunity which is payable in cash upon the successful
achievement of work related financial and non-financial key performance indicators (“KPI”). These KPI’s are chosen to
represent the key drivers of short term success for the Company with reference to Regis’ long term strategy.
The LTI refers to the “at risk” reward opportunity which takes the form of performance rights, being the issue of
shares in Regis in the future, subject to meeting predetermined performance and vesting conditions.
Executive remuneration levels are reviewed annually by the Remuneration, Nomination and Diversity Committee with
reference to the remuneration guiding principles and market movements.
Gloster Construction // Photo by Stan Yates
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The chart below provides a summary of the structure of executive remuneration in the 2017 and subsequent
financial years:
37
FIXED REMUNERATION
Base salary + superannuation + benefits
VARIABLE REMUNERATION
STI plan
Cash
LTI plan
Performance rights
To maximise engagement of executives and align with the long-term interests of shareholders, the initial grant of
LTI’s in 2017 have a two year performance/vesting period with a one year holding lock restricting trading on any
shares issued under the plan. Subsequent grants of performance rights will apply a performance/vesting period of
three years.
REMUNERATION MIX – TARGET
38%
43%
33%
50%
Executive
Chairman
19%
Other
Executives
17%
Fixed remuneration
STI
LTI
REGIS RESOURCES // 2017 ANNUAL REPORT ELEMENTS OF REMUNERATION
38
Fixed remuneration
Fixed remuneration consists of base remuneration (including any fringe benefits tax charges related to employee
benefits), as well as employer contributions to superannuation funds. The Group allows KMP to salary sacrifice
superannuation for additional benefits (on a total cost basis).
Remuneration levels are reviewed annually by the Remuneration, Nomination and Diversity Committee through
a process that considers individual and overall performance of the Group. In addition, external consultants may
provide analysis and advice to ensure the KMP’s remuneration is competitive in the market place, as required.
Performance linked remuneration
Performance linked remuneration includes both STI and LTI and is designed to reward KMP for meeting or exceeding
their objectives.
Short Term Incentive
Under the STI plan, all executives have the opportunity to earn an annual incentive which is delivered in cash.
The STI recognises and rewards annual performance.
How is it paid?
Any STI award is paid in cash after the assessment of annual performance.
How much can
executives earn?
In 2017, the Executive Chairman had a maximum STI opportunity of 45% of fixed
remuneration and other executives had a maximum STI opportunity of 35% of fixed
remuneration.
An overarching review by the board of each individual’s performance against agreed
performance measures and a review of qualitative factors around the Company’s
performance and the macro economic environment will determine the achievable
percentage (between 0%-100%) of the maximum potential STI available to be awarded,
subject further to the level of achievement against detailed KPI’s listed below.
This maximum achievable STI percentage will automatically be 0% in a given financial
year in the event of a workplace fatality at any of the Company’s operations in that year.
How is performance
measured?
A combination of specific Company Key Performance Indicators (KPIs) are chosen to reflect
the core drivers of short term performance and also to provide a framework for delivering
sustainable value to the Group and its shareholders.
The following KPIs were chosen for the 2017 financial year:
KPI 1: EBITDA relative to internal targets (35%(i));
KPI 2: Production relative to stated guidance (35%(i)); and
KPI 3: Safety and environmental performance targets (30%(i)).
When is it paid?
What happens if
executive leaves?
The STI award is determined after the end of the financial year following a review of
performance over the year against the STI performance measures by the Remuneration,
Nomination and Diversity Committee. The Board approves the final STI award based on
this assessment of performance and the award is paid in cash three months after the end
of the performance period.
If an executive resigns or is terminated for cause before the end of the financial year, no
STI is awarded for that year. If an executive ceases employment during the performance
period by reason of redundancy, ill health, death, or other circumstances approved by the
Board, the executive will be entitled to a pro-rata cash payment based on assessment
of performance up to the date of ceasing employment for that year (subject to Board
discretion).
What happens if there
is a change of control?
In the event of a change of control, a pro-rata cash payment will be made based on
assessment of performance up to the date of the change of control (subject to Board
discretion).
(i) Represents the maximum award if stretch targets are met.
REGIS RESOURCES // REMUNERATION REPORT (AUDITED) (continued) Long Term Incentives
Under the LTI plan, annual grants of performance rights are made to executives to align remuneration with the
creation of shareholder value over the long-term.
39
How is it paid?
How much can
executives earn?
Executives are eligible to receive performance rights (being the issue of shares in Regis
in the future).
In 2017, the Executive Chairman had a maximum LTI opportunity of 90% of fixed
remuneration and other executives had a maximum LTI opportunity of 65% of fixed
remuneration.
An overarching review by the board of each individual’s performance against agreed
performance measures and a review of qualitative factors around the Company’s
performance and the macro economic environment will determine the achievable
percentage (between 0%-100%) of the maximum potential LTI available to be awarded,
subject further to the level of achievement against detailed KPI’s listed below.
This maximum achievable LTI percentage will automatically be 0% in a given financial
year in the event of a workplace fatality at any of the Company’s operations in that year.
How is performance
measured?
The vesting of performance rights are subject to a number of vesting conditions. The
performance rights issued in 2017 are subject to the following vesting conditions:
Relative Total Shareholder Return (25%(i)) measured on a sliding scale against a select
peer group of comparator companies. (ASX code: AQG, BDR DRM, EVN, KRM, MML, MOY,
NCM, NST, OGC, PRU, RMS, RSG, SAR, SBM, SLR, TGZ, TRY);
Absolute Total Shareholder Return (25%(i));
Absolute earnings per share (“EPS”) (25%(i)) measured against a pre-determined
target(ii) set by the board (as an average across two 12 month periods); and
Reserve growth and production replacement over the two year vesting period (25%(i))
When is performance
measured?
The performance rights issued in 2017 have a two year performance period with the
vesting of the rights tested as at 30 June 2018. All subsequent issues of performance
rights will have a three year performance period. Any performance rights that do not vest
will lapse after testing. There is no re-testing of performance rights.
What happens if
executive leaves?
What happens if there
is a change of control?
Are executives eligible
for dividends?
Where an executive ceases to be an employee of any Group Company:
due to resignation or termination for cause, then any unvested rights will automatically
lapse on the date of the cessation of employment; or
due to any other reason, then a proportion of any unvested rights will lapse equivalent
to the proportion of time remaining in the period during which the relevant vesting
conditions must be satisfied and the remaining unvested rights will continue and are
still capable of vesting in accordance with the relevant vesting conditions at the end
of that period,
unless the Board determines otherwise.
If a matter, event, circumstance or transaction occurs that the Board reasonably believes
may lead to a change of control, the Board may in its discretion determine the treatment
and timing of such treatment of any unvested rights and must notify the holder of any
changes to the terms of the rights as a result of such a decision. If a change of control
occurs and the Board hasn’t made such a decision, all unvested rights will vest and be
automatically exercised.
Executives are not eligible to receive dividends on unvested performance rights.
(i) Represents the maximum award if stretch targets are met.
(ii) Targets and actual outcomes for each of the STI and LTI performance measures will be disclosed in the relevant remuneration report in the year
the award may vest. This is to recognise commercial sensitivity of disclosing key organisational metrics.
REGIS RESOURCES // 2017 ANNUAL REPORT PERFORMANCE AND EXECUTIVE REMUNERATION OUTCOMES IN 2017
40
Actual remuneration earned by executives in 2017
The actual remuneration earned by executives in the year ended 30 June 2017 is set out in Tables 1 to 7 below. This
provides shareholders with a view of the remuneration actually paid to executives for performance in 2017 year and
the value of LTIs that vested during the period.
Performance against STI measures
A combination of financial and non-financial measures is used to measure performance for STI rewards. Company
performance against those measures is as follows for 2017:
KEY PERFORMANCE INDICATOR
WEIGHTING METRIC
ACHIEVEMENT
KPI 1: EBITDA
35%
Achieve FY2017 Budget EBITDA
KPI 2: Production
35%
Production within stated guidance
KPI 3: Safety and Environment
30%
Reduction in safety and
environmental measures
Stretch target achieved
– 100% award
Threshold target achieved
– 43% award
Threshold target achieved
– 50% award
Based on this assessment, the STI payments for FY2017 to Executives were recommended as detailed in the following
table:
NAME
POSITION
ACHIEVED STI
STI AWARDED
Mark Clark
Paul Thomas
Executive Chairman
Chief Operating Officer
Peter Woodman
Chief Geologist
Kim Massey
Chief Financial Officer & Company Secretary
%
65%
65%
65%
65%
$
205,320
125,474
91,253
91,253
Performance against LTI measures
LTIs awards granted in 2017 will be subject to testing at the end of the two year performance period on 30 June 2018.
In November 2016, after receiving approval from shareholders at the AGM, 401,999 performance rights were granted
in total to the Executive Directors, Mr Mark Clark and Mr Paul Thomas, and to other executives, Mr Kim Massey
and Mr Peter Woodman, under the Group’s Executive Incentive Plan (“EIP”). Further details of the grant, including
performance conditions and the calculation of fair value is disclosed in the Note 24 to the financial statements. As of
30 June 2017 no performance rights had vested and become exercisable.
Statutory performance indicators
We aim to align our executive remuneration to our strategic and business objectives and the creation of shareholder
wealth. The table below shows measures of the Group’s financial performance over the past five years as required
by the Corporations Act 2001. However these measures are not necessarily consistent with the measures used in
determining the variable amounts of remuneration to be awarded to KMPs, as discussed above. As a consequence,
there may not always be a direct correlation between the statutory key performance measures and the variable
remuneration awarded.
2017
$’000
2016
$’000
2015
$’000
2014
$’000
2013
$’000
Revenue
543,799
502,019
465,320
371,933
416,834
Net profit/(loss) after tax
138,163
111,793
86,920
(147,830)
146,506
Basic earnings/(loss) per share (cents)
Diluted earnings/(loss) per share (cents)
27.59
27.29
22.37
22.22
17.39
17.39
(29.68)
(29.68)
30.65
30.27
Net assets
538,392
481,848
409,973
321,060
538,096
REGIS RESOURCES // REMUNERATION REPORT (AUDITED) (continued) PERFORMANCE AND EXECUTIVE REMUNERATION ARRANGEMENTS IN 2018
Following a review by the Remuneration, Nomination and Diversity Committee subsequent to the end of the 2017
financial year, the Board resolved to set STI and LTI hurdles as follows for the 2018 financial year:
41
COMPONENT
LINKS TO FY2018 PERFORMANCE
Total Fixed Remuneration (TFR)
Salaries awarded effective 1 July 2017 used as basis for determining the value
component for FY2018 STI and LTI. The maximum STI and LTI opportunity
that each KMP can earn remains unchanged, except for Mr Thomas whose
maximum STI and LTI opportunity was increased to 40% and 75% of TFR,
respectively, for the 2018 year.
Short Term Incentives (STI)
The following KPIs were chosen for the 2018 financial year:
Long Term Incentives (LTI)
KPI 1: Achieve FY2018 Budget EBITDA as approved by the Board (35%(i));
KPI 2: Production relative to stated guidance (35%(i)); and
KPI 3: Safety and environmental performance measures (30%(i)).
At the time of preparation of this report, the allocation of the LTIs for FY2018
had not been determined by the board, however the vesting conditions will
remain unchanged from those used for the 2017 award. The LTI awards to be
issued in FY2018 will have a three year performance period.
(i) Represents the maximum award if stretch targets are met.
SERVICE CONTRACTS
The Group has entered into service contracts with each KMP. The service contract outlines the components of
remuneration paid to each key management person but does not prescribe how remuneration levels are modified
year to year. Remuneration levels are reviewed each year to take into account cost-of-living changes, any change in
the scope of the role performed by the key management person and any changes required to meet the principles of
the remuneration policy. No service contract specifies a term of employment or entitlement to performance based
incentives, except as detailed below for the Executive Chairman.
Mr Mark Clark, the Company’s Executive Chairman, is employed under a fixed term contract, with the following
significant terms:
Current contract has a three year term to 3 May 2018;
Fixed remuneration of $766,500 per annum inclusive of superannuation (2016: $711,750) subject to annual review;
and
Opportunity to earn a performance based STI and LTI determined by the Board.
Each key management person, except as specified below, is subject to a notice period of 1 month which the Company
may pay in part or full of the required notice period. The key management personnel are also entitled to receive,
on termination of employment, statutory entitlements of accrued annual and long service leave, and any accrued
superannuation contributions would be paid to their fund. In the case of a genuine redundancy, executives would
receive their statutory entitlements based on completed years of service.
The Executive Chairman’s termination provisions are as follows:
NOTICE PERIOD
PAYMENT IN
LIEU OF NOTICE
ENTITLEMENT TO OPTIONS AND
RIGHTS ON TERMINATION
Employer initiated termination:
without reason
with reason
serious misconduct
3 months plus 9 months’ salary
Not less than 3 months
0 – 1 month
12 months
Not less than 3 months
0 – 1 month
Options – 1 month to exercise,
extendable at Board discretion
Rights – refer to LTI details above
Employee initiated termination 3 months
Not specified
Change of control
1 month plus 12 months’ salary Not specified
As above
As above
REGIS RESOURCES // 2017 ANNUAL REPORT Mr Paul Thomas, the Company’s Chief Operating Officer, is employed under a contract with the following termination
provisions:
NOTICE PERIOD
PAYMENT IN
LIEU OF NOTICE
ENTITLEMENT TO OPTIONS AND
RIGHTS ON TERMINATION
Employer initiated termination:
with or without reason
serious misconduct
3 months
0 – 1 month
Up to 3 months
0 – 1 month
Options – 1 month to exercise,
extendable at Board discretion
Rights – refer to LTI details above
Employee initiated termination 3 months
Not specified
As above
Change of control
1 month plus 12 months’ salary Not specified
As above
Mr Kim Massey, the Company’s Chief Financial Officer and Company Secretary is entitled to 1 months’ notice plus
12 months’ salary in the event of a change of control.
NON-EXECUTIVE DIRECTORS
Total remuneration for all non-executive directors, last voted upon by shareholders at the 2011 AGM, is not to
exceed $500,000 per annum. At the date of this report, total non-executive directors’ base fees are $362,000 per
annum excluding superannuation. Non-executive directors’ fees cover all main board activities and membership
of board committees. Non-executive directors do not receive performance-related compensation and are not
provided with any retirement benefits, apart from statutory superannuation. From time to time, non-executive
directors may provide consulting services to the Company and in these cases they are paid consulting fees in line
with industry rates.
The Board has resolved not to increase non-executive director fees for 2018 other than Mr Okeby who will receive an
additional $10,000 per annum as Lead Independent Director.
Garden Well Processing Plant // Photo by Christine Darbyshire
42
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KEY MANAGEMENT PERSONNEL REMUNERATION
Table 1: Remuneration for the year ended 30 June 2017
43
SHORT TERM
POST
EMPLOYMENT
LONG-TERM
BENEFITS
SHARE-BASED
PAYMENT
2017
SALARY &
FEES
CASH
REWARDS
NON-
MONETARY
BENEFITS*
SUPER-
ANNUATION
ACCRUED
ANNUAL & LONG
SERVICE LEAVE#
OPTIONS &
RIGHTS+
TOTAL
PERFORMANCE
RELATED
$
Non-Executive Directors
G Evans(i)
R Kestel(ii)
J Mactier
F Morgan(iv)
M Okeby(iii)
7,083
97,000
85,000
52,362
117,076
$
-
-
-
-
-
Executive Directors
M Clark(v)
653,420
205,320
P Thomas(v)
521,590
125,474
Other Executives
K Massey(v)
373,076
91,253
P Woodman(v)
367,261
91,253
$
-
-
-
-
-
3,734
3,734
3,734
3,734
$
673
9,215
8,075
4,974
8,075
32,083
33,125
29,115
34,075
$
-
-
-
-
-
$
-
-
-
-
-
$
%
7,756
106,215
93,075
57,336
125,151
-
-
-
-
-
78,441
902,692
1,875,690
59.07%
54,296
336,693
1,074,912
43.00%
47,724
322,906
867,808
32,406
468,703
997,432
47.72%
56.14%
Total
2,273,868
513,300
14,936
159,410
212,867
2,030,994 5,205,375
*
#
+
Non-monetary benefits are presented at actual cost plus any fringe benefits tax paid or payable by the Group.
Long term benefits for accrued annual and long service leave are the movements in the provision, net of any leave taken.
Represents the statutory remuneration expensed based on fair value at grant date of options and rights over the vesting period of the award. No
options or rights vested during the year for KMPs apart from Mr Thomas and Mr Massey as detailed in Table 3. Table 3 reflects the realised benefits
of share-based payments for the year.
(i) Mr Evans retired as non-executive director on 29 July 2016.
(ii) Mr Kestel’s fees include an additional $12,000 for chairing the Board Committees.
(iii) Mr Okeby’s fees includes an additional $32,076 for consulting services provided in his capacity as a director.
(iv) Ms Morgan was appointed as non-executive director on 18 November 2016.
(v) Mr Clark, Mr Thomas, Mr Woodman and Mr Massey elected to receive a portion of their superannuation entitlements above the statutorily required
maximum amount as salary.
REGIS RESOURCES // 2017 ANNUAL REPORT 44
Historical items found at Gloster // Photo by Stan Yates
Table 2: Remuneration for the year ended 30 June 2016
SHORT TERM
POST
EMPLOYMENT
LONG-TERM
BENEFITS
SHARE-
BASED
PAYMENT
2016
SALARY &
FEES
$
Non-Executive Directors
N Giorgetta
83,333
M Okeby
G Evans
80,000
80,000
F Fergusson
26,767
R Kestel
J Mactier
92,000
30,295
Executive Directors
M Clark
618,363
P Thomas
452,527
Other Executives
J Balkau
197,144
P Woodman
150,879
M Evans
280,811
K Massey
333,908
NON-
MONETARY
BENEFITS*
SUPER-
ANNUATION
ACCRUED
ANNUAL
LEAVE^
OPTIONS
TERMINATION
PAYMENTS
TOTAL
PERFORMANCE
RELATED
$
-
-
-
-
-
-
5,525
5,525
3,683
2,302
4,604
5,525
$
7,917
7,600
7,600
2,543
8,740
2,878
$
-
-
-
-
-
-
$
-
-
-
-
-
-
30,875
62,512
401,289
47,500
47,473
853,160
$
-
-
-
-
-
-
-
-
$
%
91,250
87,600
87,600
29,310
100,740
33,173
-
-
-
-
-
-
1,118,564
35.88%
1,406,185
60.67%
19,317
6,190
51,759
116,545
394,638
15,736
14,762
163,972
-
347,651
28,262
16,689
-
100,226
430,592
13.12%
47.17%
-
35,625
41,092
238,469
-
654,619
36.43%
Total
2,426,027
27,164
214,593
188,718
1,708,649
216,771 4,781,922
*
^
Non-monetary benefits are presented at actual cost plus any fringe benefits tax paid or payable by the Group.
Accrued annual leave was disclosed as part of “Salary & Fees” in the prior year financial statements, but has been split out in the comparative
table above for consistency with the current year disclosure.
REGIS RESOURCES // REMUNERATION REPORT (AUDITED) (continued) Table 3: Voluntary information – Non-IFRS – Remuneration received by executives for the year ended 30 June 2017
The amounts disclosed below as executive KMP remuneration for 2017 reflect the realised benefits received by each
KMP during the reporting period. The remuneration values disclosed below have been determined as follows:
45
Fixed remuneration
Fixed remuneration includes base salaries received, payments made to superannuation funds, the taxable value of
non-monetary benefits received and any once-off payments such as sign-on bonuses or termination benefits, see
Table 1 above for details. Fixed remuneration excludes any accruals of annual or long service leave.
Short-term incentives
The cash STI benefits represent the bonuses that were awarded to each KMP in relation to the prior financial year and
which were paid in the current financial year. There were no cash STI benefits awarded in relation to the year ended
30 June 2016 and as such the value of this benefit received in the current year is nil.
Long-term incentives
The value of vested options was determined based on the intrinsic value of the options at the date of vesting, being
the difference between the share price on that date and the exercise price payable by the KMP. The options that
vested during the current year were granted in August 2013 (Mr Massey) and September 2014 (Mr Thomas).
FIXED REMUNERATION
AWARDED STI (CASH)
VESTED LTI
TOTAL VALUE
Executive Directors
M Clark
P Thomas
Other Executives
K Massey
P Woodman
Total Executive KMP
Non-executive directors
Total KMP remuneration
$
756,546
592,297
432,609
432,609
2,214,061
389,533
2,603,594
$
-
-
-
-
-
-
-
$
-
3,375,000
55,000
-
$
756,546
3,967,297
487,609
432,609
3,430,000
5,644,061
-
389,533
3,430,000
6,033,594
The amounts disclosed above are not the same as the remuneration expensed in relation to each KMP in accordance
with the accounting standards ($5,205,375 for 2017, see Table 1 above). The directors believe that the remuneration
received is more relevant to users for the following reasons:
The statutory remuneration expensed is based on fair value determined at grant date and does not reflect the
fair value of the equity instruments when they are actually received by the KMPs.
The statutory remuneration shows benefits before they are actually received by the KMPs.
Where options or performance rights do not vest because a market-based performance condition is not satisfied
(e.g. absolute TSR), the Company must still recognise the full amount of expenses even though the KMPs will never
receive any benefits.
Share-based payment awards are treated differently under the accounting standards depending on whether the
performance conditions are market conditions (no reversal of expense) or non-market conditions (reversal of
expense where shares fail to vest), even though the benefit received by the KMP is the same (nil where equity
instruments fail to vest).
The information in this section has been audited together with the rest of the remuneration report.
REGIS RESOURCES // 2017 ANNUAL REPORT Tables 4 & 5: Rights and options over equity instruments granted as compensation
46
All rights and options refer to rights and options over ordinary shares of Regis Resources Limited, which are
exercisable on a one-for-one basis.
There were no options granted to KMPs as compensation during the current year. Details on options granted as
compensation in previous years and which have vested during or remain outstanding at the end of the year are
provided below.
OPTIONS
GRANTED & OUTSTANDING
TERMS & CONDITIONS FOR EACH GRANT
VESTED
FAIR VALUE
PER OPTION
AT GRANT
DATE
EXERCISE
PRICE PER
OPTION
NO. GRANT DATE
EXPIRY
DATE
VESTING
DATE
% VESTED
DURING
THE YEAR
NO.
%
FORFEITED
DURING
THE YEAR
M Clark
M Clark
750,000
12 Nov 15
$1.04
$1.40 11 Aug 19
11 Aug 17
750,000
12 Nov 15
$1.27
$1.40 11 Aug 19
11 Aug 18
P Thomas
250,000
12 Aug 15
$0.58
$1.40 11 Aug 19
11 Aug 17
P Thomas
250,000
12 Aug 15
$0.74
$1.40 11 Aug 19
11 Aug 18
-
-
-
-
-
-
-
-
P Thomas
1,500,000
12 Sep 14
$0.87
$1.55 12 Sep 17
12 Sep 16 1,500,000
100%
P Woodman
500,000
25 Jan 16
$1.00
$2.34
6 Jan 20
25 Jan 18
P Woodman
500,000
25 Jan 16
$1.29
$2.34
6 Jan 20
25 Jan 19
K Massey
500,000
12 Aug 15
$0.58
$1.40 11 Aug 19
11 Aug 17
K Massey
500,000
12 Aug 15
$0.74
$1.40 11 Aug 19
11 Aug 18
-
-
-
-
-
-
-
-
K Massey
50,000
19 Aug 13
$1.94
$3.50
31 Jul 17
31 Jul 16
50,000
50%
Total
5,550,000
1,550,000
-
-
-
-
-
-
-
-
-
-
All options expire at the earlier of their expiry date or termination of the individual’s employment. Options granted as
compensation do not have any vesting conditions other than a continuing employment service condition.
Details on performance rights that were granted as compensation to each KMP during the reporting period are as
follows:
RIGHTS
GRANTED
NUMBER OF RIGHTS GRANTED DURING 2017 TO:
VESTING
CONDITION
GRANT
DATE
FAIR VALUE
AT GRANT
DATE
TEST DATE
M CLARK
P THOMAS
K MASSEY P WOODMAN
% VESTED
DURING
THE YEAR
%
FORFEITED
DURING
THE YEAR
Relative TSR 18 Nov 16
$1.51
30 Jun 18
42,000
23,833
17,333
17,333
Absolute TSR 18 Nov 16
$0.97
30 Jun 18
42,000
23,833
17,333
17,333
Earnings
per share
18 Nov 16
$2.56
30 Jun 18
42,000
23,833
17,333
17,333
Ore reserves 18 Nov 16
$2.56
30 Jun 18
42,000
23,834
17,334
17,334
Value of rights granted during the year
$319,326
$181,205
$131,785
$131,785
168,000
95,333
69,333
69,333
-
-
-
-
-
-
-
-
The two year performance period during which the performance rights are tested ends on 30 June 2018 with the
testing to occur within 60 days after that date. Any performance rights that do not vest will lapse after testing. There
is no re-testing of performance rights. In addition to a continuing employment service condition, vesting of the
performance rights is conditional upon the Group achieving certain performance hurdles. Details of the performance
criteria are included in the long-term incentives discussion on page 39.
The value of rights granted during the year is the fair value of the rights calculated at grant date. The total value of
the rights granted is included in the table above. This amount is allocated to remuneration over the vesting period
(i.e. in years 1 July 2016 to 30 June 2018). No performance rights were exercised during the year.
REGIS RESOURCES // REMUNERATION REPORT (AUDITED) (continued) Table 6: Rights and options over equity instruments
The movement during the reporting period, by number of options over ordinary shares in Regis Resources Limited
held, directly, indirectly or beneficially, by each key management person, including their related parties, is as follows:
47
HELD AT
START OF
PERIOD
HELD AT END
OF PERIOD
VESTED AT 30 JUNE 2017
1 JULY 2016
GRANTED AS
REMUNERATION
EXERCISED
NET CHANGE
OTHER
30 JUNE 2017
TOTAL
EXERCISABLE
NOT
EXERCISABLE
Options
M Clark
1,500,000
P Thomas(i)
2,000,000
K Massey(ii)
1,100,000
P Woodman
1,000,000
Rights
M Clark
P Thomas
K Massey
P Woodman
-
-
-
-
-
-
- (1,500,000)
-
-
168,000
95,333
69,333
69,333
(100,000)
-
-
-
-
-
1,500,000
500,000
1,000,000
1,000,000
168,000
95,333
69,333
69,333
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(i) The intrinsic value of options exercised by Mr Thomas during the year was $3,375,000. Mr Thomas exercised his options using the cashless exercise
feature available under the Regis ESOP and was issued with 899,225 ordinary shares as a result. No amounts remain unpaid on the shares issued.
(ii) The intrinsic value of options exercised by Mr Massey during the year was $55,000. Mr Massey exercised his options using the cashless exercise
feature available under the Regis ESOP and was issued with 17,062 ordinary shares as a result. No amounts remain unpaid on the shares issued.
There were no options granted to KMPs during the year. No options or rights were forfeited during the prior year due
to performance criteria not being achieved. There have been no alterations to the terms and conditions of options
awarded as remuneration since their award date.
Table 7: Shareholdings of key management personnel
The movement during the reporting period in the number of ordinary shares in Regis Resources Limited held, directly,
indirectly or beneficially, by each key management person, including their related parties, is as follows:
Non-Executive Directors
M Okeby
G Evans(i)
R Kestel
J Mactier
F Morgan(ii)
Executive Directors
M Clark
P Thomas
Other Executives
P Woodman
K Massey
Total
HELD AT
1 JULY 2016
ON EXERCISE OF
OPTIONS
NET CHANGE
OTHER
HELD AT
30 JUNE 2017
700,000
2,235,815
75,000
-
n/a
4,960,000
-
-
-
-
-
-
-
-
-
-
700,000
(2,235,815)
-
-
n/a
75,000
-
513,230
513,230
(2,500,000)
2,460,000
899,225
(899,225)
-
-
17,062
(17,062)
-
-
-
7,970,815
916,287
(5,138,872)
3,748,230
(i) Mr Evans retired as a non-executive director on 29 July 2016. “Net change other” reflects the number of shares held at this date.
(ii) Ms Morgan was appointed as non-executive director on 18 November 2016. “Net change other” represents the number of shares held at this date.
In all instances, “Net change other” relates to on-market purchases and sales of shares.
REGIS RESOURCES // 2017 ANNUAL REPORT All equity transactions with KMP other than those arising from the exercise of remuneration options have been
entered into under terms and conditions no more favourable than those the Group would have adopted if dealing at
arm’s length.
48
Loans to key management personnel and their related parties
There were no loans made to any director, key management personnel and/or their related parties during the current
or prior years.
Other transactions with key management personnel
From the date of her appointment as a director, services totalling $335,302 have been provided on normal commercial
terms to the Group by Mintrex Pty Ltd, of which Ms Morgan is a managing director, chief executive officer and a
shareholder. There was no outstanding balance payable as at 30 June 2017.
Other than the ordinary accrual of personnel expenses at balance date and transactions disclosed above, there are
no other amounts receivable from and payable to key management personnel and their related parties.
Signed in accordance with a resolution of the directors.
Mr Mark Clark
Executive Chairman
Perth, 28 August 2017
REGIS RESOURCES // REMUNERATION REPORT (AUDITED) (continued) AUDITOR’S INDEPENDENCE DECLARATION
49
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Regis Resources Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Regis Resources
Limited for the financial year ended 30 June 2017 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
R Gambitta
Partner
Perth
28 August 2017
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
REGIS RESOURCES // 2017 ANNUAL REPORT
Rosemont Main Pit sump // Photo by Amanda Gould
Financial
Statements
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
For the year ended 30 June 2017
51
Revenue
Cost of goods sold
Gross profit
Other income
Investor and corporate costs
Personnel costs
Share-based payment expense
Occupancy costs
Other corporate administrative expenses
Impairment of non-current assets
Other expenses
Finance costs
Profit before tax
Income tax expense
Profit from continuing operations
Profit attributable to members of the parent
Other comprehensive income
Items that may be reclassified to profit or loss:
Cash flow hedge reserve
Unrealised gains/(losses) on cash flow hedges
Realised gains transferred to net profit
Tax effect
Items that will not be reclassified to profit or loss:
Financial assets reserve
Changes in the fair value of financial assets designated at fair value
through other comprehensive income
Tax effect
Other comprehensive (loss)/income for the period, net of tax
Total comprehensive income for the period
NOTE
2
3
2
24
15
3
18
5
CONSOLIDATED
2017
$’000
2016
$’000
543,799
502,019
(335,827)
(335,136)
207,972
166,883
4,962
6,294
(2,117)
(5,521)
(3,222)
(585)
(312)
(2,939)
(936)
(1,165)
196,137
(57,974)
138,163
138,163
(1,677)
(5,304)
(3,317)
(547)
(457)
(21)
(839)
(1,914)
159,101
(47,308)
111,793
111,793
(641)
(4,177)
1,424
5,006
-
(1,502)
(2,180)
4,633
654
(4,920)
133,243
(1,390)
6,747
118,540
Total comprehensive income attributable to members of the parent
133,243
118,540
Basic earnings per share attributable to ordinary equity holders of the
parent (cents per share)
Diluted earnings per share attributable to ordinary equity holders of the
parent (cents per share)
4
4
27.59
27.29
22.37
22.22
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
Financial
Statements
REGIS RESOURCES // 2017 ANNUAL REPORT CONSOLIDATED
BALANCE SHEET
52
As at 30 June 2017
Current assets
Cash and cash equivalents
Gold bullion awaiting settlement
Receivables
Inventories
Derivatives
Financial assets
Other current assets
Total current assets
Non-current assets
Inventories
Financial assets
Property, plant and equipment
Exploration and evaluation assets
Mine properties under development
Mine properties
Intangible assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Interest-bearing liabilities
Income tax payable
Provisions
Derivatives
Total current liabilities
Non-current liabilities
Interest-bearing liabilities
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained profits
Total equity
NOTE
7
8
9
10
21
19
10
19
11
12
13
14
16
18
17
21
18
23
17
22
22
CONSOLIDATED
2017
$’000
119,428
24,934
6,833
39,328
260
263
1,197
2016
$’000
99,535
22,764
5,257
29,134
5,006
155
1,139
192,243
162,990
35,452
-
182,388
151,735
-
123,244
802
493,621
685,864
43,719
1,506
2,193
4,607
102
52,127
841
49,403
45,101
95,345
147,472
25,866
6,442
187,663
123,739
1,199
83,358
-
428,267
591,257
35,155
1,125
11,123
1,903
713
50,019
1,485
20,806
37,099
59,390
109,409
538,392
481,848
431,491
26,876
80,025
431,335
28,574
21,939
538,392
481,848
The above balance sheet should be read in conjunction with the accompanying notes.
REGIS RESOURCES // 2017 ANNUAL REPORT CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
For the year ended 30 June 2017
53
CONSOLIDATED
SHARE-
BASED
PAYMENT
RESERVE
FINANCIAL
ASSETS
RESERVE
CASH
FLOW
HEDGE
RESERVE
RETAINED
PROFITS/
(ACCUMULA-
TED LOSSES)
ISSUED
CAPITAL
TOTAL
EQUITY
$’000
$’000
$’000
$’000
$’000
$’000
431,335
21,827
3,243
3,504
21,939
481,848
At 1 July 2016
Profit for the period
Other comprehensive income
Changes in the fair value of financial assets,
net of tax
Changes in the value of cash flow hedges, net of tax
Total other comprehensive income for the year,
net of tax
Total comprehensive income for the year, net of tax
Transactions with owners in their capacity as owners:
Share-based payments expense
Dividends paid
Shares issued, net of transaction costs
156
-
-
-
-
-
-
(1,526)
-
-
-
(3,394)
(1,526)
(3,394)
138,163
138,163
-
-
-
(1,526)
(3,394)
(4,920)
(1,526)
(3,394)
138,163
133,243
3,222
-
-
-
-
-
-
-
-
-
3,222
(80,077)
(80,077)
-
156
At 30 June 2017
431,491
25,049
1,717
110
80,025
538,392
At 1 July 2015
Profit for the period
Other comprehensive income
Changes in the fair value of financial assets,
net of tax
Changes in the value of cash flow hedges, net of tax
Total other comprehensive income for the year,
net of tax
Total comprehensive income for the year, net of tax
431,338
18,510
-
-
3,243
-
-
-
-
3,504
3,243
3,504
(39,875)
409,973
111,793
111,793
-
-
-
3,243
3,504
6,747
3,243
3,504
111,793
118,540
-
-
-
-
-
Transactions with owners in their capacity as owners:
Share-based payments expense
Dividends paid
Shares issued, net of transaction costs
(3)
3,317
-
-
-
-
-
-
-
-
-
3,317
(49,979)
(49,979)
-
(3)
At 30 June 2016
431,335
21,827
3,243
3,504
21,939 481,848
The above statement of changes in equity should be read in conjunction with the accompanying notes.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
REGIS RESOURCES // 2017 ANNUAL REPORT CONSOLIDATED
STATEMENT OF CASH FLOWS
54
For the year ended 30 June 2017
NOTE
CONSOLIDATED
2017
$’000
2016
$’000
Cash flows from operating activities
Receipts from gold sales
Payments to suppliers and employees
Option premium income received
Interest received
Interest paid
Proceeds from rental income
Income tax paid
Net cash from operating activities
7
Cash flows from investing activities
Acquisition of property, plant and equipment
Proceeds on disposal of property, plant and equipment
540,048
490,098
(300,416)
(266,569)
1,302
1,504
(126)
-
(36,230)
206,082
2,715
1,745
(1,063)
8
(22,933)
204,001
(23,395)
(20,469)
2
165
Payments for exploration and evaluation (net of rent refunds)
(32,366)
(18,141)
Payments for acquisition of exploration assets (net of cash)
Payments for financial assets
Proceeds on disposal of financial assets
Payments for mine properties under development
Payments for mine properties
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payment of transaction costs
Payment of dividends
Repayment of finance lease
Repayment of borrowings
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at 1 July
(3,370)
-
4,154
(9,506)
(100)
(1,812)
-
(816)
(40,301)
(44,355)
(104,782)
(85,528)
175
(19)
-
(3)
(80,077)
(49,979)
(1,486)
(737)
-
(20,000)
(81,407)
(70,719)
19,893
99,535
47,754
51,781
Cash and cash equivalents at 30 June
7
119,428
99,535
The above statement of cash flows should be read in conjunction with the accompanying notes.
REGIS RESOURCES // 2017 ANNUAL REPORT Rosemont North Pit // Photo by Amanda Gould
Ore haulage from Erlistoun to Garden Well // Photo by Sarah Parfett
Notes to the
Financial
Statements
Basis of preparation
Performance for the year
1. Segment Information
2. Revenue and Other Income
3. Expenses
4. Earnings per Share
5. Current Income Tax
6. Dividends
7. Cash and Cash Equivalents
Operating assets and liabilities
8. Gold Bullion Awaiting Settlement
9. Receivables
10. Inventories
11. Property, Plant and Equipment
12. Exploration and Evaluation Assets
13. Mine Properties under Development
14. Mine Properties
15. Impairment of Non-Financial Assets
16. Trade and Other Payables
17. Provisions
58
59
59
60
62
64
65
66
66
68
68
68
69
70
71
72
72
74
75
75
Capital structure, financial instruments and risk 77
18. Net Debt and Finance Costs
19. Financial Assets
20. Financial Risk Management
21. Derivatives and Hedging
22. Issued Capital and Reserves
Other disclosures
23. Deferred Income Tax
24. Share-based Payments
25. Related Parties
26. Parent Entity Information
27. Commitments
28. Contingencies
29. Auditor’s Remuneration
30. Subsequent Events
31. New Accounting Standards and Interpretations
77
78
79
82
84
85
85
87
90
91
92
93
93
93
93
BASIS OF PREPARATION
58
Regis Resources Limited (“Regis” or the “Company”) is a for profit company limited by shares, incorporated and
domiciled in Australia, whose shares are publicly traded on the Australian Securities Exchange. Its registered office
and principal place of business is:
Regis Resources Limited
Level 1
1 Alvan Street
Subiaco WA 6008
A description of the nature of operations and principal activities of Regis and its subsidiaries (collectively, the
“Group”) is included in the Directors’ Report, which is not part of these financial statements.
The financial statements were authorised for issue in accordance with a resolution of the directors on 28 August 2017.
The financial report is a general purpose financial report which:
has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting
Standards and other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and
complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board (IASB);
has been prepared on a historical cost basis except for assets and liabilities and share-based payments which
are required to be measured at fair value. The basis of measurement is discussed further in the individual notes;
is presented in Australian dollars with all values rounded to the nearest thousand dollars ($’000) unless otherwise
stated, in accordance with ASIC Instrument 2016/191;
presents reclassified comparative information where required for consistency with the current year’s presentation;
adopts all new and amended Accounting Standards and Interpretations issued by the AASB that are relevant to
the operations of the Group and effective for reporting periods beginning on or after 1 July 2016. Refer to note 31
for further details;
does not early adopt Accounting Standards and Interpretations that have been issued or amended but are not yet
effective. Refer to note 31 for further details.
Principles of consolidation
The consolidated financial statements comprise the financial statements of the Group. A list of controlled entities
(subsidiaries) at year end is contained in note 25.
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using
consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that
may exist.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and
expenses and profits and losses resulting from intra-group transactions have been eliminated. Subsidiaries are
consolidated from the date on which control is obtained to the date on which control is disposed. The acquisition
of subsidiaries is accounted for using the acquisition method of accounting.
Foreign currencies
Both the functional currency of each entity within the Group and the Group’s presentation currency is Australian
dollars.
Transactions in foreign currencies are initially recorded in Australian dollars at the exchange rate on that day. Foreign
currency monetary assets and liabilities are translated to Australian dollars at the reporting date exchange rate.
Foreign currency gains and losses are generally recognised in profit or loss.
Other accounting policies
Significant and other accounting policies that summarise the measurement basis used and are relevant to an
understanding of the financial statements are provided throughout the notes to the financial statements. Where
possible, wording has been simplified to provide clearer commentary on the financial report of the Group. Accounting
policies determined non-significant are not included in the financial statements. There have been no changes to the
Group’s accounting policies that are no longer disclosed in the financial statements.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) Key estimates and judgements
In the process of applying the Group’s accounting policies, management has made a number of judgements and
applied estimates of future events. Judgements and estimates which are material to the financial report are found
in the following notes.
59
Note 3
Note 10
Note 12
Note 14
Note 15
Note 17
Note 23
Note 24
Expenses
Inventories
Exploration and evaluation assets
Mine properties
Impairment
Provisions
Deferred income tax
Share-based payments
Page 62
Page 69
Page 71
Page 72
Page 74
Page 75
Page 85
Page 87
The notes to the financial statements
The notes include information which is required to understand the financial statements and is material and relevant
to the operations and the financial position and performance of the Group. Information is considered relevant and
material if, for example:
the amount is significant due to its size or nature;
the amount is important for understanding the results of the Group;
it helps to explain the impact of significant changes in the Group’s business; or
it relates to an aspect of the Group’s operations that is important to its future performance.
The notes are organised into the following sections:
Performance for the year;
Operating assets and liabilities;
Capital structure and risk;
Other disclosures.
A brief explanation is included under each section.
PERFORMANCE FOR THE YEAR
This section focuses on the results and performance of the Group. This covers both profitability and the resultant
return to shareholders via earnings per share combined with cash generation and the return of cash to shareholders
via dividends.
1. SEGMENT INFORMATION
Operating segments are reported in a manner that is consistent with the internal reporting provided to the Executive
Chairman and his executive management team (the chief operating decision makers). The Group has two reportable
segments which comprise the Duketon Gold Project; being Duketon North Operations (“DNO”), currently comprising
Moolart Well and Gloster and Duketon South Operations (“DSO”), currently incorporating Garden Well, Rosemont and
Erlistoun. The segments are unchanged from those reported at 30 June 2016. A number of new mining operations
at satellite pits will commence in the next several years. In addition to Moolart Well and Gloster, DNO will include
Dogbolter, Petra and Anchor pits as all will be processed through the Moolart Well processing plant. DSO will add
Baneygo and Tooheys Well and the other satellite projects in that area to the Garden Well leaching circuit.
Unallocated items comprise corporate administrative costs (including personnel costs, share based payments,
occupancy costs and investor and corporate costs), interest revenue, finance costs, net gains and losses on derivatives,
exploration and evaluation assets relating to areas of interest where an economically recoverable reserve is yet to
be delineated, cash, derivative assets and income tax assets.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment,
conduct exploration and evaluation activities and develop mine properties.
REGIS RESOURCES // 2017 ANNUAL REPORT The following table presents financial information for reportable segments for the years ended 30 June 2017 and
30 June 2016:
60
DUKETON NORTH
OPERATIONS
DUKETON SOUTH
OPERATIONS
UNALLOCATED
TOTAL
2017
2016
2017
2016
2017
2016
2017
2016
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Continuing Operations
Segment revenue
Sales to external customers
170,065
124,661
372,153
375,491
Other revenue
-
-
-
-
Total segment revenue
170,065
124,661
372,153
375,491
-
1,581
1,581
-
542,218
500,152
1,867
1,581
1,867
1,867
543,799
502,019
Total revenue per the statement
of comprehensive income
543,799
502,019
Interest expense
Impairment of non-current assets
-
-
-
-
-
-
-
-
126
2,939
981
21
126
2,939
981
21
Depreciation and amortisation
18,061
34,482
39,392
40,607
218
248
57,671
75,337
Depreciation capitalised
Total depreciation and amortisation
recognised in the statement of
comprehensive income
Segment result
Segment net operating
profit/(loss) before tax
Segment assets
(90)
(93)
57,581
75,244
80,724
30,341
127,455
137,886
(12,042)
(9,126)
196,137
159,101
Segment assets at balance date
82,066
62,087
308,108
272,784
295,690
256,386
685,864
591,257
Capital expenditure for the year
18,436
18,974
46,622
41,386
32,306
17,692
97,364
78,052
2. REVENUE AND OTHER INCOME
Accounting Policies
Gold sales
Revenue is recognised and measured at the fair value of the consideration received or receivable, when the amount
of revenue can be reliably measured and it is probable that future economic benefits will flow to the Group. The
specific recognition criteria for the Group’s gold sales is upon dispatch of the gold bullion from the mine site as this is
the point at which the significant risks and rewards of ownership and control of the product passes to the customer.
Adjustments are made for variations in gold price, assay and weight between the time of dispatch and the time of
final settlement.
Interest
Interest income is recognised as it accrues using the effective interest method.
Revenue
Gold sales
Interest
CONSOLIDATED
2017
$’000
2016
$’000
542,218
500,152
1,581
1,867
543,799
502,019
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) Gold forward contracts
As part of the risk management policy of the Group and in compliance with the conditions required by the Group’s
financier, the Group enters into gold forward contracts to manage the gold price of a proportion of anticipated gold
sales. The counterparty to the gold forward contracts is Macquarie Bank Limited (“MBL”).
61
It is management’s intention to settle each contract through physical delivery of gold and as such, the gold forward
sale contracts disclosed below do not meet the criteria of financial instruments for accounting purposes. This
is referred to as the “normal purchase/sale” exemption. Accordingly, the contracts will be accounted for as sale
contracts with revenue recognised once the gold has been delivered to MBL or its agent.
Open contracts at balance date are summarised in the table below:
GOLD FOR PHYSICAL
DELIVERY
CONTRACTED GOLD
SALE PRICE
VALUE OF COMMITTED
SALES
MARK-TO-MARKET(I)
2017
2016
ounces
ounces
2017
$/oz
2016
$/oz
2017
2016
2017
2016
$’000
$’000
$’000
$’000
Within one year
– Spot deferred contracts(ii)
396,406
353,770
1,551
1,581
614,718
559,206
(25,386)
(68,594)
– Fixed forward contracts
-
80,000
-
1,454
-
116,280
-
(27,121)
396,406
433,770
614,718
675,486
(25,386)
(95,715)
Mark-to-market has been calculated with reference to the following spot price at period end
$1,615/oz $1,774/oz
(i) Mark-to-market represents the value of the open contracts at balance date, calculated with reference to the gold spot price at that date. A
negative amount reflects a valuation in the counterparty’s favour.
(ii) The contracted gold sale price disclosed for spot deferred contracts reflects a weighted average of a range of contract prices. The range of prices
at the end of the year was from $1,408/oz to $1,810/oz (2016: $1,402/oz to $1,803/oz).
Other income
Rehabilitation provision adjustment
Net gain on financial instruments at fair value through profit or loss
Ineffectiveness on commodity swap contracts designated as cash flow hedges
Rental income
CONSOLIDATED
2017
$’000
2,977
1,913
72
-
2016
$’000
4,283
2,002
-
9
4,962
6,294
The net gain on financial instruments at fair value through profit or loss relates to sold gold call options that do not
qualify for hedge accounting. During the current financial year, the Group sold gold call options for 35,000 ounces with
a weighted average exercise price of $1,716/oz (2016: 73,000 ounces at A$1,700/oz). Offsetting the premium income
received during the current year is the fair value of open contracts at balance date, recognised on the balance sheet
as “derivative liabilities”. For more information on the measurement and recognition of derivatives, refer to note 21.
REGIS RESOURCES // 2017 ANNUAL REPORT 3. EXPENSES
62
Accounting Policies
Cash costs of production
Cash costs of production is a component of cost of goods sold and includes direct costs incurred for mining, milling,
laboratory and mine site administration, net of costs capitalised to pre-strip and production stripping assets. This
category also includes movements in the cost of inventory and any net realisable value write downs.
Cost of goods sold
Cash costs of production
Royalties
Depreciation of mine plant and equipment
Amortisation of mine properties
Depreciation
CONSOLIDATED
2017
$’000
2016
$’000
255,074
238,158
23,300
31,484
25,969
21,889
42,823
32,266
335,827
335,136
Depreciation of mine specific plant and equipment and buildings and infrastructure is charged to the statement
of comprehensive income on a unit-of-production basis over the economically recoverable reserves of the mine
concerned, except in the case of assets whose useful life is shorter than the life of the mine, in which case the
straight-line method is used. The unit of account is tonnes of ore milled.
Depreciation of non-mine specific plant and equipment is charged to the statement of comprehensive income and
exploration and evaluation assets on a straight-line basis over the estimated useful lives of each part of an item of
plant and equipment in current and comparative periods as follows:
Plant and equipment: 3 - 20 years
Fixtures and fittings: 3 - 20 years
Leasehold improvements: 10 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
Amortisation
Mine properties are amortised on a unit-of-production basis over the economically recoverable reserves of the mine
concerned. The unit of account is tonnes of ore milled.
Depreciation and amortisation
Depreciation expense
Amortisation expense
Less: Amounts capitalised
Depreciation and amortisation charged to the statement of comprehensive income
CONSOLIDATED
2017
$’000
31,702
25,969
(90)
57,581
2016
$’000
43,071
32,266
(93)
75,244
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) KEY ESTIMATES AND ASSUMPTIONS
Unit-of-production method of depreciation/amortisation
63
The Group uses the unit-of-production basis when depreciating/amortising life of mine specific assets which results
in a depreciation/amortisation charge proportionate to the depletion of the anticipated remaining life of mine
production. Each item’s economic life, which is assessed annually, has due regard for both its physical life limitations
and to present assessments of economically recoverable reserves of the mine property at which it is located.
Employee benefits expense
Wages and salaries
Defined contribution superannuation expense
Share-based payments expense
Employee bonuses
Other employee benefits expense
Less: Amounts capitalised
Employee benefits expense recognised in the statement of
comprehensive income
Lease payments and other expenses included in the statement of
comprehensive income
Minimum lease payments – operating lease
Less: Amounts capitalised
Recognised in the statement of comprehensive income
Other expenses
Gold swap fees
Non-capital exploration expenditure
Loss on disposal of assets
NOTE
24
CONSOLIDATED
2017
$’000
2016
$’000
35,700
33,459
3,235
3,222
335
2,425
44,917
(4,826)
3,027
3,317
-
2,118
41,921
(3,365)
40,091
38,556
380
(114)
266
49
804
83
936
356
(107)
249
175
660
4
839
REGIS RESOURCES // 2017 ANNUAL REPORT No. shares
4. EARNINGS PER SHARE
64
Accounting Policy
Earnings per share (“EPS”) is the amount of post-tax profit attributable to each share. The Group presents basic and
diluted EPS data for ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary
shareholders of the Company by the weighted average number of ordinary shares outstanding during the period.
Diluted EPS takes into account the dilutive effect of all potential ordinary shares, being unlisted employee share
options and performance rights on issue.
Earnings used in calculating EPS
Net profit attributable to ordinary equity holders of the parent
138,163
111,793
CONSOLIDATED
2017
$’000
2016
$’000
Weighted average number of shares
Issued ordinary shares at 1 July
Effect of shares issued
Weighted average number of ordinary shares at 30 June
Effect of dilution:
Share options
Performance rights
NO. SHARES
NO. SHARES
('000s)
('000s)
499,854
499,782
928
6
500,782
499,788
5,225
247
3,291
-
Weighted average number of ordinary shares adjusted for the effect of dilution
506,254
503,079
There have been no transactions involving ordinary shares between the reporting date and the date of completion
of these financial statements which would impact on the above EPS calculations.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) 5. CURRENT INCOME TAX
Accounting Policy
Current tax
65
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
The major components of income tax expense are:
Current income tax
Current income tax expense
Adjustment in respect of income tax of previous years
Deferred income tax
Relating to the origination and reversal of temporary differences
Adjustment in respect of income tax of previous years
Income tax expense reported in the statement of comprehensive income
Deferred tax payable/(receivable) related to items recognised in OCI during the year
Net (loss)/gain on revaluation of cash flow hedges
Net (loss)/gain on financial assets
Deferred tax charged to OCI
A reconciliation between tax expense and the product of accounting profit before
tax multiplied by the Group’s applicable income tax rate is as follows:
Accounting profit before income tax
At the Group’s statutory income tax rate of 30% (2016: 30%)
Share-based payments
Other non-deductible items
Adjustment in respect of income tax of previous years
Income tax expense reported in the statement of comprehensive income
CONSOLIDATED
2017
$’000
2016
$’000
30,198
(3,635)
29,614
1,797
57,974
(1,424)
(654)
(2,078)
196,137
58,841
966
5
(1,838)
57,974
31,996
(1,462)
16,736
38
47,308
1,502
1,390
2,892
159,101
47,730
996
6
(1,424)
47,308
REGIS RESOURCES // 2017 ANNUAL REPORT 6. DIVIDENDS
66
Declared and paid during the year:
Dividends on ordinary shares
Final franked dividend for 2016: 9 cents per share (2015: 6)
Interim franked dividend for 2017: 7 cents per share (2016: 4)
CONSOLIDATED
2017
$’000
2016
$’000
45,007
35,070
80,077
29,987
19,992
49,979
Proposed by the directors after balance date but not recognised as a liability at 30 June:
Dividends on ordinary shares
Final dividend for 2017: 8 cents per share (2016: 9 cents per share)
40,143
45,006
Dividend franking account
Amount of franking credits available to shareholders of Regis Resources
Limited for subsequent financial years
5,625
12,644
The ability to utilise the franking credits is dependent upon the ability to declare dividends.
7. CASH AND CASH EQUIVALENTS
Accounting Policy
Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term deposits with an
original maturity of 3 months or less that are readily convertible to known amounts of cash and which are subject to
insignificant changes in value. Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-
term deposits are made for varying periods of between one and three months, depending on the immediate cash
requirements of the Group, and earn interest at the respective short-term deposit rates.
At 30 June 2017, the Group had no undrawn, committed borrowing facilities available (2016: nil). Refer to note 18.
Cash and cash equivalents in the balance sheet and cash flow statement
Cash at bank and on hand
Short-term deposits
Restrictions on cash
CONSOLIDATED
2017
$’000
69,428
50,000
119,428
2016
$’000
99,535
-
99,535
The Group is required to maintain $161,000 (2016: $161,000) on deposit to secure a bank guarantee in relation to the
Perth office lease. The amount will be held for the term of the lease. Refer to note 27.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) Reconciliation of profit after income tax to net cash inflow from
operating activities
Net profit for the year
Adjustments for:
Impairment of non-current assets
Unwinding of discount on provisions
Loss on disposal of assets
Unrealised (loss)/gain on derivatives
Share-based payments
Rehabilitation provision adjustment
Depreciation and amortisation
Changes in assets and liabilities
(Increase)/decrease in gold bullion awaiting settlement
(Increase)/decrease in receivables
(Increase)/decrease in inventories
(Increase)/decrease in other current assets
Increase/(decrease) in income tax payable
Increase/(decrease) in trade and other payables
Increase/(decrease) in deferred tax liabilities
Increase/(decrease) in provisions
Net cash from operating activities
Non-cash financing and investing activities
CONSOLIDATED
2017
$’000
2016
$’000
67
138,163
111,793
2,939
1,039
83
(683)
3,222
(2,977)
57,581
21
933
4
713
3,317
(4,283)
75,244
(2,170)
(10,054)
(365)
(376)
(18,669)
(2,805)
(64)
(7,308)
7,539
29,053
(1,301)
(180)
7,601
5,899
16,774
(600)
206,082
204,001
During the year ended 30 June 2017, the Group entered into a hire purchase arrangement for the acquisition of a
second Komatsu WA600 loader for the Duketon Gold Project. The amount financed was $1,222,000 (2016: first Komatsu
Loader $1,222,000).
Refer to note 18 for further details. These transactions are not reflected in the statement of cash flows.
REGIS RESOURCES // 2017 ANNUAL REPORT OPERATING ASSETS AND LIABILITIES
68
This section shows the assets used to generate the Group’s trading performance and the liabilities incurred as a
result. Liabilities relating to the Group’s financing activities are addressed in the capital structure and finance costs
section on page 77.
8. GOLD BULLION AWAITING SETTLEMENT
Accounting Policy
Bullion awaiting settlement comprises gold that has been received by the refiner prior to period end but which has
not yet been delivered into a sale contract. Bullion awaiting settlement is initially recognised at the expected selling
price and adjustments for variations in the gold price are made at the time of final settlement.
Due to the short-term nature of the bullion awaiting settlement, the carrying value is assumed to approximate fair
value. The maximum exposure to credit risk is the fair value.
CONSOLIDATED
2017
$’000
2016
$’000
Current
Gold bullion awaiting settlement
24,934
22,764
At balance date, gold bullion awaiting settlement comprised 15,487 ounces valued at a weighted average realisable
value of $1,610/oz (2016: 12,538 ounces at $1,815/oz).
9. RECEIVABLES
Accounting Policy
Receivables are initially recognised at fair value and subsequently at the amounts considered receivable (financial
assets at amortised cost). Balances within receivables do not contain impaired assets, are not past due and are
expected to be received when due.
The Group does not have trade receivables in relation to gold sales. The only material receivables at year end are
for GST and fuel tax credits receivable from the Australian Taxation Office and therefore, the Group is not generally
exposed to credit risk in relation to its receivables.
Due to the short-term nature of these receivables, their carrying value is assumed to approximate fair value.
Current
GST receivable
Fuel tax credit receivable
Security deposit for land acquisition
Interest receivable
Dividend trust account
Other receivables
CONSOLIDATED
2017
$’000
3,323
1,570
974
217
498
251
2016
$’000
2,955
1,527
-
140
439
196
6,833
5,257
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) 10. INVENTORIES
Accounting Policy
69
Gold bullion, gold in circuit and ore stockpiles are physically measured or estimated and valued at the lower of cost
and net realisable value. Cost is determined by the weighted average method and comprises direct purchase costs
and an appropriate portion of fixed and variable overhead costs, including depreciation and amortisation, incurred in
converting ore into gold bullion. Net realisable value is the estimated selling price in the ordinary course of business,
less estimated costs of completion and costs of selling the final product, including royalties.
Consumable stores are valued at the lower of cost and net realisable value. The cost of consumable stores is measured
on a first-in first-out basis.
Inventories expected to be sold (or consumed in the case of stores) within 12 months after the balance sheet date
are classified as current assets, all other inventories are classified as non-current.
Current
Ore stockpiles
Gold in circuit
Bullion on hand
Consumable stores
Non-current
Ore stockpiles
CONSOLIDATED
2017
$’000
2016
$’000
25,894
16,733
6,098
4,254
3,082
8,957
525
2,919
39,328
29,134
35,452
25,866
At 30 June 2016, there was no expense recognised in costs of goods sold for inventories carried at net realisable value.
At 30 June 2017, a portion of ore stockpiles were reclassified as non-current as a result of the annual update of life of
mine plans and written down to net realisable value resulting in an expense totalling $1,440,000 being recognised in
cost of goods sold. During the year, all other inventories were carried at cost. (2016: all inventory is carried at cost).
KEY ESTIMATES AND ASSUMPTIONS
Inventories
Net realisable value tests are performed at each reporting date and represent the estimated future sales price
of the product based on prevailing spot metals process at the reporting date, less estimated costs to complete
production and bring the product to sale.
Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the number of
contained gold ounces based on assay data, and the estimated recovery percentage. Stockpile tonnages are verified
by periodic surveys.
REGIS RESOURCES // 2017 ANNUAL REPORT 11. PROPERTY, PLANT AND EQUIPMENT
70
Accounting Policy
The value of property, plant and equipment is measured as the cost of the asset, less accumulated depreciation and
impairment. The cost of the asset also includes the cost of replacing parts that are eligible for capitalisation, the cost
of major inspections and an initial estimate of the cost of dismantling and removing the item from site at the end of
its useful life (rehabilitation provisions). Changes in the rehabilitation provisions resulting from changes in the size
or timing of the cost or from changes in the discount rate are also recognised as part of the asset cost.
Derecognition
An item of property, plant and equipment is derecognised when it is sold or otherwise disposed of, or when its use
is expected to bring no further economic benefits. Any gain or loss from derecognising the asset (the difference
between the proceeds on disposal and the carrying amount of the asset) is included in the income statement in the
period the item is derecognised.
FREEHOLD
LAND
LEASEHOLD
IMPROVEMENTS
PLANT &
EQUIPMENT
FURNITURE &
EQUIPMENT
BUILDINGS &
INFRASTRUCTURE
CAPITAL
WIP
TOTAL
CONSOLIDATED
$’000
$’000
$’000
Net carrying amount at 1 July 2016
16,488
Additions
Depreciation expense
Transfers to mine properties
Transfers between classes
Rehabilitation provision
adjustments
Disposals
-
-
-
-
-
-
341
28
114,609
6,400
(76)
(21,306)
-
10
-
-
-
4,551
55
(85)
$’000
616
108
(176)
-
52
-
-
$’000
$’000
$’000
47,561
8,048
187,663
9,361
8,327
24,224
(10,144)
-
(31,702)
-
(18)
3,259
(7,872)
2,251
-
-
-
(18)
-
2,306
(85)
Net carrying amount at 30 June 2017
16,488
303
104,224
600
52,288
8,485
182,388
At 30 June 2017
Cost
16,488
762
234,758
Accumulated depreciation
-
(459)
(130,534)
Net carrying amount
16,488
303
104,224
Net carrying amount at 1 July 2015
16,488
409
133,541
1,817
(1,217)
600
613
221
102,539
8,485
364,849
(50,251)
-
(182,461)
52,288
8,485
182,388
47,537
10,371
208,959
1,308
12,290
22,231
Additions
Depreciation expense
Transfers between classes
Rehabilitation provision
adjustments
Disposals
-
-
-
-
-
4
8,408
(72)
(30,238)
(229)
(12,532)
-
(43,071)
-
-
-
3,101
(34)
(169)
11
-
-
11,501
(14,613)
-
(253)
-
-
-
(287)
(169)
Net carrying amount at 30 June 2016
16,488
341
114,609
616
47,561
8,048
187,663
At 1 July 2015
Cost
16,488
721
213,694
Accumulated depreciation
-
(312)
(80,153)
Net carrying amount
16,488
409
133,541
1,432
(819)
613
76,187
10,371
318,893
(28,650)
-
(109,934)
47,537
10,371
208,959
At 30 June 2016
Cost
16,488
725
223,997
Accumulated depreciation
-
(384)
(109,388)
Net carrying amount
16,488
341
114,609
1,663
(1,047)
616
88,104
8,048
339,025
(40,543)
-
(151,362)
47,561
8,048
187,663
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) 12. EXPLORATION AND EVALUATION ASSETS
Accounting Policy
71
Exploration and evaluation expenditure is accumulated on an area of interest basis. Exploration and evaluation
assets include the costs of acquiring licences, costs associated with exploration and evaluation activity, and the fair
value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Expenditure is
carried forward when incurred in areas for which the Group has rights of tenure and where economic mineralisation
is indicated, but activities have not yet reached a stage which permits a reasonable assessment of the existence
or otherwise of economically recoverable reserves and active and significant operations in, or in relation to, the
area of interest are continuing. Costs incurred before the Group has obtained the legal rights to explore an area are
recognised in the statement of comprehensive income.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are
demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment
and then reclassified to mine properties under development. No amortisation is charged during the exploration and
evaluation phase.
Reconciliation of movements during the year
Balance at 1 July
Expenditure for the period
Acquisition of tenements
Impairment
Transferred to mine properties
Balance at 30 June
Acquisition of tenements
NOTE
15
14
CONSOLIDATED
2017
$’000
123,739
31,976
3,382
(2,917)
(4,445)
151,735
2016
$’000
118,779
17,440
100
(21)
(12,559)
123,739
During the year, the Group acquired the Blayney Gold Project tenement from Aeris Resources Limited for $3.25 million
(paid in cash), paid $100,000 to Delta Gold Pty Ltd to acquire its 28.78% beneficial interest in the Bandya Joint Venture
tenements (taking the Group’s interest in these tenements to 100%) and paid $20,000 to Hot Holdings Pty Ltd to
acquire its 49% beneficial interest in an exploration license (taking the Group’s interest in this license to 100%).
Impairment
Exploration and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical
feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the
recoverable amount. For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-
generating units (“CGUs”) to which the exploration activity relates. The CGU is not larger than the area of interest.
Carrying value by area of interest
Duketon North Operations
Duketon South Operations
Duketon Gold Project satellite deposits
Regional WA exploration
NSW exploration
8,868
14,281
12,757
9,267
106,562
151,735
1,840
3,144
19,343
7,947
91,465
123,739
KEY ESTIMATES AND ASSUMPTIONS
Impairment of exploration and evaluation assets
The future recoverability of capitalised exploration and evaluation expenditure is dependent upon a number of
factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully
recovers the related exploration and evaluation asset through sale.
Factors that could impact future recoverability include the level of reserves and resources, future technological
changes which could impact the cost of mining, future legal changes (including changes to environmental restoration
obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the
future, profits and net assets will be reduced in the period in which the determination is made.
REGIS RESOURCES // 2017 ANNUAL REPORT Exploration expenditure commitments
72
Exploration expenditure commitments represent tenement rentals and expenditure requirements that may be
required to be met under the relevant legislation should the Group wish to retain tenure on all current tenements in
which the Group has an interest.
The terms and conditions under which the Group retains title to its various mining tenements oblige it to meet
tenement rentals and minimum levels of exploration expenditure as gazetted by the Western Australian and New
South Wales state governments, as well as local government rates and taxes.
The exploration commitments of the Group not provided for in the consolidated financial statements and payable
are as follows:
Within one year
CONSOLIDATED
2017
$’000
2,317
2016
$’000
2,804
The tenement commitments shown above represent the minimum required to be spent on all granted tenements as
at reporting date. Actual expenditure will vary as a result of ongoing management of the tenement portfolio including
reductions and relinquishment of tenements not considered prospective, in whole or in part.
Tenement commitments are shown gross of exemptions that are likely to be available in the ordinary course of
business as the financial impact of potential exemptions cannot be measured reliably in advance.
13. MINE PROPERTIES UNDER DEVELOPMENT
Accounting Policy
Mine properties under development represents the costs incurred in preparing mines for production and includes
plant and equipment under construction and operating costs incurred before production commences. These costs
are capitalised to the extent they are expected to be recouped through the successful exploitation of the related
mining leases. Once production commences, these costs are transferred to property, plant and equipment and
mine properties, as relevant, and are depreciated and amortised using the units-of-production method based on
the estimated economically recoverable reserves to which they relate or are written off if the mine property is
abandoned.
NOTE
14
CONSOLIDATED
2017
$’000
1,199
9,158
(1,111)
(9,246)
2016
$’000
68
1,131
-
-
-
1,199
Balance at beginning of period
Pre-production expenditure capitalised
Transferred to inventory
Transferred to mine properties
Balance at end of period
14. MINE PROPERTIES
Accounting Policies
Production stripping costs
Once access to the ore is attained, all waste that is removed from that point forward is considered production
stripping activity. The amount of production stripping costs deferred is based on the extent to which the current
period cost per tonne of ore mined exceeds the expected cost per tonne for the life of the identified component. A
component is defined as a specific volume of the ore body that is made more accessible by the stripping activity, and
is identified based on the mine plan.
The production stripping asset is initially measured at cost, which is the accumulation of costs directly incurred to
perform the stripping activity that improves access to the identified component of the ore body. The production
stripping asset is then carried at cost less accumulated amortisation and any impairment losses.
The production stripping asset is amortised over the expected useful life of the identified component (determined
based on economically recoverable reserves), on a unit of production basis. The unit of account is tonnes of ore mined.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) Pre-strip costs
In open pit mining operations, it is necessary to remove overburden and waste materials to access the ore. This
process is referred to as stripping and the Group capitalises stripping costs incurred during the development of a
mine (or pit) as part of the investment in constructing the mine (“pre-strip”). These costs are subsequently amortised
over the life of mine on a units of production basis, where the unit of account is tonnes of ore milled.
73
Other mine properties
Other mine properties represents expenditure in respect of exploration, evaluation, feasibility and pre-production
operating costs incurred by the Group previously accumulated and carried forward in mine properties under
development in relation to areas of interest in which mining has now commenced. Other mine properties are stated
at cost, less accumulated amortisation and accumulated impairment losses.
Other mine properties are amortised on a unit-of-production basis over the economically recoverable reserves of the
mine concerned. The unit of account is tonnes of ore milled.
CONSOLIDATED
PRODUCTION
STRIPPING COSTS
PRE-STRIP
COSTS
OTHER MINE
PROPERTIES
Net carrying amount at 1 July 2016
Additions
Transfers from exploration and evaluation assets
Transfers from pre-production
Transfers from property, plant and equipment
Rehabilitation provision adjustment
Amortisation expense
Net carrying amount at 30 June 2017
At 30 June 2017
Cost
Accumulated amortisation
Net carrying amount
Net carrying amount at 1 July 2015
Additions
Transfers from exploration and evaluation assets
Rehabilitation provision adjustment
Amortisation expense
Net carrying amount at 30 June 2016
At 30 June 2016
Cost
Accumulated amortisation
Net carrying amount
At 1 July 2015
Cost
Accumulated amortisation
Net carrying amount
$’000
19,969
22,398
-
4,321
-
-
(4,801)
41,887
63,563
(21,676)
41,887
20,464
5,521
-
-
(6,016)
19,969
36,843
(16,874)
19,969
31,322
(10,858)
20,464
$’000
37,334
11,213
-
3,606
-
-
(11,334)
40,819
82,154
(41,335)
40,819
31,663
21,794
-
-
(16,123)
37,334
67,335
(30,001)
37,334
45,541
(13,878)
31,663
$’000
26,055
7,535
4,445
1,319
18
11,000
(9,834)
40,538
TOTAL
$’000
83,358
41,146
4,445
9,246
18
11,000
(25,969)
123,244
96,803
242,520
(56,265)
(119,276)
40,538
123,244
13,747
9,935
12,559
(59)
(10,127)
26,055
72,486
(46,431)
26,055
50,051
(36,304)
13,747
65,874
37,250
12,559
(59)
(32,266)
83,358
176,664
(93,306)
83,358
126,914
(61,040)
65,874
REGIS RESOURCES // 2017 ANNUAL REPORT KEY ESTIMATES AND ASSUMPTIONS
74
Production stripping costs
The Group capitalises mining costs incurred during the production stage of its operations in accordance with the
accounting policy described above. The identification of specific components will vary between mines as a result
of both the geological characteristics and location of the ore body. The financial considerations of the mining
operations may also impact the identification and designation of a component.
The expected cost per tonne is a function of an individual mine’s design and therefore changes to that design will
generally result in changes to the expected cost. Changes in other technical or economic parameters that impact
reserves will also have an impact on the expected costs per tonne for each identified component. Changes in the
expected cost per tonne are accounted for prospectively from the date of change.
15. IMPAIRMENT OF NON-FINANCIAL ASSETS
Accounting policy
At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where
an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying
amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its
recoverable amount.
The recoverable amount of other assets is the greater of their fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an
asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-
generating unit to which the asset belongs.
Impairment losses are reversed when there is an indication that the impairment loss may no longer exist and there
has been a change in the estimate used to determine the recoverable amount. An impairment loss is reversed only to
the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment loss had been recognised.
Total impairment losses recognised in the statement of comprehensive income for the year were as follows:
Exploration and evaluation assets
Exploration and evaluation assets
NOTE
12
CONSOLIDATED
2017
$’000
2,939
2016
$’000
21
An impairment loss of $343,000 (2016: $21,000) has been recognised in relation to tenements that were surrendered,
relinquished or expired during the year.
An impairment loss of $2,596,000 was recognised for the tenements relating to the Duketon Gold Exploration Joint
Venture. The Joint Venture required Regis to spend at least $1 million over a 2 year period to earn a 75% interest in any
mining project that is confirmed by a Regis decision to mine. The 2 year term expires in October 2017 and at 30 June 2017
no significant targets had been found. Limited work is planned to be undertaken subsequent to year end and as such,
all costs incurred have been written off in the current year. There were no other indicators of impairment identified.
KEY JUDGEMENTS
Determination of mineral resources and ore reserves
The determination of mineral resources and ore reserves impacts the accounting for asset carrying values. The Group
estimates its mineral resources and ore reserves in accordance with the Australian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves 2012 (the “JORC” Code). The information on mineral resources and ore
reserves was prepared by or under the supervision of Competent Persons as defined in the JORC Code. The amounts
presented are based on the mineral resources and ore reserves determined under the JORC Code.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves, and assumptions that
are valid at the time of estimation may change significantly when new information becomes available.
Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the
economic status of reserves and may ultimately result in reserves being restated.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) 16. TRADE AND OTHER PAYABLES
Accounting Policies
Trade payables
75
Trade and other payables are initially recognised at the value of the invoice received from a supplier and subsequently
measured at amortised cost. They represent liabilities for goods and services provided to the Group prior to the
end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in
respect of the purchase of these goods and services. The amounts are unsecured and generally paid within 30 days
of recognition.
Employee entitlements
A liability is recognised for the amount expected to be paid to an employee for annual leave they are presently
entitled to as a result of past service. The liability includes allowances for on-costs such as superannuation and
payroll taxes, as well as any future salary and wage increases that the employee may be reasonably entitled to.
Current
Trade payables
Accrued expenses
Employee entitlements – annual leave payable
Other payables
17. PROVISIONS
Accounting Policies
CONSOLIDATED
2017
$’000
16,892
16,628
2,881
7,318
43,719
2016
$’000
14,182
11,241
2,727
7,005
35,155
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount
is recognised as a finance cost. Refer to note 18.
Site rehabilitation
In accordance with the Group’s published environmental policy and applicable legal requirements, a provision for
site rehabilitation is recognised in respect of the estimated cost of rehabilitation and restoration of the areas
disturbed by mining activities up to the reporting date, but not yet rehabilitated.
When the liability is initially recorded, the estimated cost is capitalised by increasing the carrying amount of the
related mining assets. At each reporting date the site rehabilitation provision is re-measured to reflect any changes
in discount rates and timing or amounts to be incurred. Additional disturbances or changes in rehabilitation costs
will be recognised as additions or changes to the corresponding asset and rehabilitation provision, prospectively
from the date of change. For closed sites, or where the carrying value of the related asset has been reduced to nil
either through depreciation and amortisation or impairment, changes to estimated costs are recognised immediately
in the statement of comprehensive income.
REGIS RESOURCES // 2017 ANNUAL REPORT Long service leave
76
The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees
have earned in return for their service up to reporting date, plus related on costs. The benefit is discounted to
determine its present value and the discount rate is the yield at the reporting date on high-quality corporate bonds
that have maturity dates approximating the terms of the Group’s obligations
Current
Dividends payable
Long service leave
Rehabilitation
Non-current
Long service leave
Rehabilitation
Provision for rehabilitation
Balance at 1 July
Provisions made during the year
Provisions used during the year
Provisions re-measured during the year
Unwinding of discount
Balance at 30 June
CONSOLIDATED
2017
$’000
498
156
3,953
4,607
1,423
43,678
45,101
37,401
12,439
(1,138)
(2,110)
1,039
47,631
2016
$’000
438
-
1,465
1,903
1,163
35,936
37,099
42,114
-
(1,018)
(4,628)
933
37,401
Nature and purpose of provision for rehabilitation
The nature of rehabilitation activities includes dismantling and removing structures, rehabilitating mines, dismantling
operating facilities, closure of plant and waste sites and restoration, reclamation and re-vegetation of affected
areas. Typically the obligation arises when the asset is installed at the production location.
KEY ESTIMATES AND ASSUMPTIONS
Rehabilitation obligations
The Group assesses site rehabilitation liabilities annually. The provision recognised is based on an assessment of
the estimated cost of closure and reclamation of the areas using internal information concerning environmental
issues in the exploration and previously mined areas, together with input from various environmental consultants,
discounted to present value. Significant estimation is required in determining the provision for site rehabilitation
as there are many factors that may affect the timing and ultimate cost to rehabilitate sites where mining and/or
exploration activities have previously taken place. These factors include future development/exploration activity,
changes in the cost of goods and services required for restoration activity and changes to the legal and regulatory
framework. These factors may result in future actual expenditure differing from the amounts currently provided.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) CAPITAL STRUCTURE, FINANCIAL INSTRUMENTS AND RISK
This section outlines how the Group manages its capital, related financing costs and its exposure to various financial
risks. It explains how these risks affect the Group’s financial position and performance and what the Group does to
manage these risks.
77
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that
it can continue to provide returns to shareholders and benefits for other stakeholders and to maintain an efficient
capital structure to reduce the cost of capital.
The Board’s policy in relation to capital management is to regularly and consistently monitor future cash flows
against expected expenditures for a rolling period of up to 12 months in advance. The Board determines the Group’s
need for additional funding by way of either share issues or loan funds depending on market conditions at the
time. The Board defines working capital in such circumstances as its excess liquid funds over liabilities, and defines
capital as being the ordinary share capital of the Company, plus retained earnings, reserves and net debt. In order to
maintain or adjust the capital structure, the Board may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or reduce debt.
There were no changes in the Group’s approach to capital management during the year.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
18. NET DEBT AND FINANCE COSTS
Accounting Policies
Finance Leases – Group as a lessee
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership for the
lease item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present
value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction
of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance
charges are recognised as an expense in profit or loss.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease
term if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.
The carrying amounts of the Group’s current and non-current borrowings approximate their fair value.
Current interest-bearing liabilities
Finance lease liability
Non-current interest-bearing liabilities
Finance lease liability
NOTE
CONSOLIDATED
2017
$’000
2016
$’000
1,506
1,125
841
1,485
Less: cash and cash equivalents
Net cash
7
119,428
117,081
99,535
96,925
REGIS RESOURCES // 2017 ANNUAL REPORT Interest-bearing liabilities
78
Finance lease commitments
The Group has hire purchase contracts for three Komatsu loaders. The Group’s obligations are secured by the
lessors’ title to the leased assets. Ownership of the loaders passes to the Group once all contractual payments have
been made. Refer to note 27.
Finance costs
Interest expense
Unwinding of discount on provisions
Borrowing costs
CONSOLIDATED
2017
$’000
126
1,039
1,165
2016
$’000
981
933
1,914
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (i.e. an
asset that necessarily takes a substantial period of time to get ready for its intended use or sale) are capitalised as
part of the cost of that asset. All other borrowing costs are expensed as part of finance costs in the period incurred.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Unwinding of discount on provisions
The unwinding of discount on provisions represents the cost associated with the passage of time. Rehabilitation
provisions are recognised at the discounted value of the present obligation to restore, dismantle and rehabilitate
each mine site with the increase in the provision due to the passage of time being recognised as a finance cost in
accordance with the policy described in note 17.
19. FINANCIAL ASSETS
Accounting Policy
Financial assets are initially recognised at fair value, plus transaction costs that are directly attributable to its
acquisition and subsequently measured at amortised costs or fair value depending on the business model for those
assets and the contractual cash flow characteristics.
Equity instruments
Equity instruments are normally measured at fair value through profit or loss (“FVTPL”) unless the Group chooses,
on an instrument-by-instrument basis on initial recognition, to present fair value changes in other comprehensive
income (“FVOCI”). This option is irrevocable and only applies to equity instruments which are neither held for trading
nor are contingent consideration in a business combination. Gains and losses on equity instruments measured at
FVOCI are not recycled through profit and loss or disposal and there is no impairment accounting. All gains and losses
are recorded in equity through other comprehensive income.
CONSOLIDATED
2017
$’000
2016
$’000
Current
Financial assets at amortised cost – term deposit
263
155
Non-current
Financial assets at fair value through OCI – listed shares
-
6,442
Financial assets at fair value through OCI
During the year, the Group disposed of its investment in Capricorn Metals Limited (“CMM”). At 30 June 2016, the Group
held a non-controlling interest of 9% which was carried at its fair value determined with reference to the published
price quoted on the ASX, an active market (“Level 1” fair value measurement).
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) 20. FINANCIAL RISK MANAGEMENT
The Group holds financial instruments for the following purposes:
79
Financing: to raise finance for the Group’s operations or, in the case of short-term deposits, to invest surplus
funds. The principal types of instruments used include bank loans, cash and short-term deposits.
Operational: the Group’s activities generate financial instruments, including cash, receivables and trade payables.
Risk management: to reduce risks arising from the financial instruments described above, including commodity
swap contracts and gold call options.
It is, and has been throughout the year, the Group’s policy that no speculative trading in financial instruments shall
be undertaken.
The Group’s holding of these financial instruments exposes it to the following risks:
Credit risk
Liquidity risk
Market risk, including interest rate and commodity price risk
This note presents information about the Group’s exposure to each of the above risks and its objectives, policies and
processes for measuring and managing risk. These risks affect the fair value measurements applied by the Group.
Further quantitative disclosures are included throughout this financial report.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. The Audit and Risk Management Committee is responsible for developing and monitoring risk management
policies. The committee reports regularly to the Board of Directors on its activities.
Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate
risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training
and management standards and procedures, aims to develop a disciplined and constructive control environment in
which all employees understand their roles and obligations.
The Group’s Audit and Risk Management Committee oversees how management monitors compliance with the Group’s
risk management policies and procedures and reviews the adequacy of the risk management framework in relation
to the risks faced by the Group.
Credit Risk
Credit risk is the risk of financial loss to the Group if the counterparty to a financial asset fails to meet its contractual
obligation. Credit risk arises from cash and cash equivalents and gold bullion awaiting settlement. The Group has
adopted the policy of dealing with creditworthy counterparties as a means of mitigating the risk of financial loss
from defaults. Cash is deposited and gold sales settled only with institutions approved by the Board. The Group
has determined that it currently has no significant exposure to credit risk as at reporting date given banks have
investment grade credit ratings.
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk
damage to the Group’s reputation.
The Group uses weekly and monthly cash forecasting to monitor cash flow requirements. Typically the Group ensures
that it has sufficient cash on demand to meet expected operational expenses, including the servicing of financial
obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such
as natural disasters.
The following table analyses the Group’s financial liabilities, including net and gross settled financial instruments,
into relevant maturity periods based on the remaining period at the reporting date to the contractual maturity date.
The amounts disclosed in the table are the contractual undiscounted cash flows and hence will not necessarily
reconcile with the amounts disclosed in the balance sheet.
For derivative liabilities (sold gold call options), the amounts disclosed are the net amounts that would need to be
paid if the option expired out of the money. Due to their short term nature, the amounts have been estimated using
the gold spot price applicable at reporting date.
REGIS RESOURCES // 2017 ANNUAL REPORT 30 JUNE 2017
($’000)
CARRYING
AMOUNT
CONTRACTUAL
CASH-FLOWS
6 MTHS
OR LESS
6-12 MTHS
1-2 YEARS
2-5 YEARS
MORE THAN
5 YEARS
80
Trade and other payables
40,764
(40,764)
(40,764)
Derivative liabilities
Finance leases
Total
102
2,347
(102)
(2,414)
(102)
(811)
43,213
(43,280)
(41,677)
-
-
(747)
(747)
-
-
(820)
(820)
-
-
(36)
(36)
-
-
-
-
30 JUNE 2016
($’000)
CARRYING
AMOUNT
CONTRACTUAL
CASH-FLOWS
6 MTHS
OR LESS
6-12 MTHS
1-2 YEARS
2-5 YEARS
MORE THAN
5 YEARS
Trade and other payables
32,428
(32,428)
(32,428)
Derivative liabilities
Finance lease
Total
713
2,610
35,751
(713)
(2,716)
(713)
(597)
(35,857)
(33,738)
-
-
(597)
(597)
-
-
(1,130)
(1,130)
-
-
(392)
(392)
-
-
-
-
Assets pledged as security
The hedging facility provided by MBL is secured by:
a first ranking, registered fixed and floating charge over all of the assets of Regis Resources Limited and its
wholly-owned subsidiary Duketon Resources Pty Limited;
a first ranking, registered Mining Act (WA) mortgage over the Company’s interest in the Duketon Gold Project
tenements;
a fixed charge over the Proceeds Account and Gold Account; and
satisfactory security over Regis’ rights under key project documents.
The finance lease liabilities are secured by the related assets. Ownership of the assets remains with Komatsu until
all contractual payments have been made.
Financial guarantee liabilities
As at 30 June 2017, the Group did not have any financial guarantee liabilities (2016: Nil).
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, commodity
prices and equity prices will affect the Group’s income or value of its holdings of financial instruments. The objective
of market risk management is to manage and control market risk exposures within acceptable parameters, while
optimising the return.
Foreign currency risk: The Group is occasionally exposed to foreign currency risk when long lead items are purchased
in a currency other than Australian dollars. The Group maintains all of its cash in Australian dollars and does not
currently hedge these purchases. There is no significant exposure to foreign currency risk at reporting date.
Interest rate risk: Since repayment of substantially all of the principal outstanding on the secured project loan
facility with Macquarie Bank Limited (“MBL”) during the current year, the Group is only exposed to interest rate
risk through its cash deposits, which attract variable interest rates. The Group regularly reviews its current
working capital requirements against cash balances and the returns available on short term deposits. There is no
significant exposure to interest rate risk at reporting date.
Commodity price risk: The Group’s exposure to commodity price risk is purely operational and arises largely
from gold price fluctuations or in relation to the purchase of inventory with commodity price as a significant
input, such as diesel. The Group’s exposure to movements in the gold price is managed through the use of gold
forward contracts (note 2) and sold call options (note 21). The gold forward sale contracts do not meet the
criteria of financial instruments for accounting purposes on the basis that they meet the normal purchase/
sale exemption because physical gold will be delivered into the contract. No sensitivity analysis is provided for
these contracts as they are outside the scope of AASB 9 Financial Instruments (2014). The sold call options are
classified as derivative financial instruments at fair value through profit or loss. Refer to note 21 for sensitivity
and other analysis.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) The Group implemented a medium term risk management strategy during the prior year to take advantage of
historically low oil prices by entering into commodity swap transactions on gasoil to hedge exposure to movements
in the Australian dollar price of diesel. Regis considers the gasoil component to be a separately identifiable and
measurable component of diesel. This hedge arrangement fixes a significant proportion (approximately two thirds) of
the total estimated annual diesel usage at the Group’s Duketon operations. Sensitivity of the Group’s profit or loss to
the hedged exposures is analysed in note 21.
81
Interest rate risk
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:
Fixed rate instruments
Term deposits
Finance lease liabilities
Variable rate instruments
Cash and cash equivalents
CONSOLIDATED
2017
$’000
50,263
(2,347)
47,916
2016
$’000
155
(2,610)
(2,455)
69,167
99,105
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss.
Therefore a change at reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable rate instruments
A sensitivity analysis has not been disclosed in relation to the variable interest rate cash on deposit and secured
bank loan as the results have been determined to be immaterial to the statement of comprehensive income for both
the current and prior financial years.
Fair Values
The carrying amounts and estimated fair values of all of the Group’s financial instruments recognised in the financial
statements are materially the same. The methods and assumptions used to estimate the fair value of the financial
instruments are disclosed in the respective notes.
Valuation of financial instruments
For all fair value measurements and disclosures, the Group uses the following to categorise the method used:
Level 1: the fair value is calculated using quoted prices in active markets.
Level 2: the fair value is estimated using inputs other than quoted prices included in Level 1, that are observable
for the asset or liability, either directly (as prices) or indirectly (derived from prices). The Group’s derivative
liabilities (sold gold call options) and derivative assets (cash flow hedges) are classified as Level 2, as they were
valued using valuation techniques that employ the use of market observable inputs. The most frequently applied
valuation techniques include forward pricing and swap models using present value calculations. The models
incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward
rates, and spot and forward rate curves of the underlying commodity. The changes in counterparty credit risk
had no material effect on the hedge effectiveness assessment for the commodity swaps designated in hedge
relationships and the sold gold call options recognised at fair value.
Level 3: the fair value is estimated using inputs for the asset or liability that are not based on observable market
data. The Group does not have any financial assets or liabilities in this category.
For financial instruments that are carried at fair value on a recurring basis, the Group determines whether transfers
have occurred between Levels in the hierarchy by reassessing categorisation (based on the lowest level input that
is significant to the fair value measurement as a whole) at the end of each reporting period. There were no transfers
between levels during the year.
REGIS RESOURCES // 2017 ANNUAL REPORT 21. DERIVATIVES AND HEDGING
82
Accounting policy
Recognition
Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract
is entered into and are subsequently remeasured to fair value as per note 20. The method of recognising any re-
measurement gain or loss depends on the nature of the item being hedged. Any changes in the fair value of a derivative
instrument that does not qualify for hedge accounting are recognised immediately in the income statement. For
hedge instruments, any hedge ineffectiveness is recognised directly in the income statement in the period in which
it is incurred.
Hedge accounting
At the start of a hedge relationship, the Group formally designates and documents the hedge relationship, including
the risk management strategy for undertaking the hedge. This includes identification of the hedge instrument,
the hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging
instrument’s effectiveness. Hedge accounting is only applied where effective tests are met on a prospective basis.
For the purposes of hedge accounting, hedges are classified as:
fair value hedges when they hedge the exposure to changes in the fair value of a recognised asset, liability or firm
commitment that could affect profit or loss; or
cash flow hedges when they hedge a particular risk associated with the cash flows of recognised assets and
liabilities and highly probable forecast transactions.
Regis will discontinue hedge accounting prospectively only when the hedging relationship, or part of the hedging
relationship no longer qualifies for hedge accounting, which includes where there has been a change to the risk
management objective and strategy for undertaking the hedge and instances when the hedging instrument expires
or is sold, terminated or exercised. For this purpose, the replacement or rollover of a hedging instrument into another
hedging instrument is not an expiration or termination if such a replacement or rollover is consistent with our
documented risk management objective.
Derivatives (current assets)
Designated as cash flow hedges
Derivatives (current liabilities)
CONSOLIDATED
2017
$’000
2016
$’000
260
5,006
Sold gold call options (not qualifying for hedge accounting)
(102)
(713)
Hedges that meet the criteria for hedge accounting are classified and accounted for as follows:
Cash flow hedges
The Group uses cash flow hedges to mitigate the risk of variability of future cash flows attributable to diesel price
fluctuations over the hedging period associated with our operations at the Duketon Gold Project, where it has highly
probable purchases of diesel. For cash flow hedges, the portion of the gain or loss on the hedging instrument that is
effective is recognised directly in equity, while the ineffective portion is recognised in profit or loss.
Amounts recognised in equity are transferred to the income statement when the hedged transaction affects profit
or loss, such as when hedged expenses are recognised or when the asset is consumed. When the hedged item is the
cost of a non-financial asset or liability, the amounts taken to equity are transferred to the initial carrying amount
of the non-financial asset or liability.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) NOTIONAL AMOUNT
LINE ITEM IN THE
BALANCE SHEET
CONSOLIDATED
2017
$’000
2016
$’000
83
Cash flow hedges
Diesel swap – 12 month contract expiring
30 April 2017 – fixed at $0.404/litre
2,000,000 litres/ month
(20,000,000 litres)
Derivatives
(current assets)
Diesel swap – 18 month contract expiring
31 October 2017 – fixed at $0.419/litre
2,000,000 litres/month
(32,000,000 litres)
Derivatives
(current assets)
Diesel swap – 8 month contract expiring 30
June 2018 – fixed at $0.487/litre
2,000,000 litres/month
(16,000,000 litres)
Derivatives
(current assets)
Diesel swap – 12 month contract expiring
30 June 2018 – fixed at $0.4825/litre
2,000,000 litres/month
(24,000,000 litres)
Derivatives
(current assets)
-
1,988
260
3,018
-
-
-
-
260
5,006
The terms of the commodity swap match the terms of the expected highly probable forecast transactions. For the
year ended 30 June 2017, hedge ineffectiveness of $72,000 was recognised in the statement of profit or loss as
detailed in the table below (2016: nil).
The above hedging relationships affected profit or loss and other comprehensive income as follows:
2017
CASH FLOW HEDGES
HEDGING GAIN/
(LOSS) RECOGNISED
IN OCI
INEFFECTIVENESS
RECOGNISED IN
PROFIT OR LOSS
LINE ITEM IN THE
STATEMENT OF
PROFIT OR LOSS
Diesel swaps
$’000
(641)
$’000
72
Other income
4,177 Cost of goods sold
AMOUNT
RECLASSIFIED
FROM OCI TO
PROFIT OR LOSS
$’000
LINE ITEM IN THE
STATEMENT OF PROFIT
OR LOSS
2016
CASH FLOW HEDGES
HEDGING GAIN/
(LOSS) RECOGNISED
IN OCI
INEFFECTIVENESS
RECOGNISED IN
PROFIT OR LOSS
LINE ITEM IN THE
STATEMENT OF
PROFIT OR LOSS
AMOUNT
RECLASSIFIED
FROM OCI TO
PROFIT OR LOSS
LINE ITEM IN THE
STATEMENT OF PROFIT
OR LOSS
Diesel swaps
$’000
5,006
$’000
-
n/a
$’000
-
n/a
If the forecast transaction is no longer expected to occur, amounts previously recognised in equity are transferred to
the income statement. If the hedging instrument expires or is sold, terminated or exercised without replacement or
roll over, or if its designation as a hedge is revoked, amounts previously recognised in equity remain in equity until
the forecast transaction occurs. There were no such events during the current or prior year.
REGIS RESOURCES // 2017 ANNUAL REPORT Commodity Price Sensitivity
84
The table below summarises the gain/(loss) impact of reasonably possible changes in market risk, relating to existing
financial instruments, on net profit and equity before tax as disclosed for the prior year. Due to the immaterial value
of exposures at 30 June 2017, no sensitivity analysis has been disclosed. For the purpose of this disclosure for the 2016
year, the following assumptions were used:
10% per litre increase and decrease in the Australian dollar gasoil price
A$20 per ounce increase and decrease in the spot price of gold
Sensitivity analysis assumes hedge designations as at 30 June 2016 remain unchanged and all designations
are effective
2016
Cash flow hedges
Diesel swaps
Derivatives
Sold gold call options
CHANGE IN
YEAR-END PRICE
EFFECT ON PROFIT
(BEFORE TAX)
EFFECT ON EQUITY
(BEFORE TAX)
+10%
-10%
+A$20
-A$20
$’000
-
-
(285)
261
$’000
2,630
(2,627)
-
-
22. ISSUED CAPITAL AND RESERVES
Accounting Policy
Ordinary shares are classified as equity. Transaction costs directly attributable to the issue of shares or options are
recognised as a deduction from equity, net of any related income tax effects.
Ordinary shares – issued and fully paid
Movement in ordinary shares on issue
At 1 July 2015
Issued on exercise of options
Transaction costs
At 30 June 2016
Issued on exercise of options
Transaction costs
At 30 June 2017
CONSOLIDATED
2017
$’000
2016
$’000
431,491
431,335
NO. SHARES
(‘000s)
$’000
499,781
431,338
73
-
-
(3)
499,854
431,335
1,166
-
175
(19)
501,020
431,491
The holders of ordinary shares are entitled to receive dividends as declared from time to time and, on a poll, are
entitled to one vote per share at meetings of the Company. The Company does not have authorised capital or par
value in respect of its issued shares.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) SHARE-BASED
PAYMENT RESERVE
FINANCIAL ASSETS
RESERVE
CASH FLOW HEDGE
RESERVE
TOTAL RESERVES
85
$’000
18,510
-
-
3,317
21,827
-
-
3,222
25,049
$’000
-
4,633
(1,390)
-
3,243
(2,180)
654
-
1,717
$’000
-
5,006
(1,502)
-
3,504
(4,818)
1,424
-
110
$’000
18,510
9,639
(2,892)
3,317
28,574
(6,998)
2,078
3,222
26,876
Balance at 1 July 2015
Net gain on financial instruments
recognised in equity
Tax effect of transfers and revaluations
Share-based payment transactions
Balance at 30 June 2016 and 1 July 2016
Net loss on financial instruments
recognised in equity
Tax effect of transfers and revaluations
Share-based payment transactions
Balance at 30 June 2017
Nature and purpose of reserves
Share-based payment reserve
The share-based payment reserve is used to record the value of share-based payments and performance rights
provided to employees, including KMP, as part of their remuneration, as well as non-employees.
Financial assets reserve
The financial assets reserve records fair value changes on financial assets designated at fair-value through other
comprehensive income.
Cash flow hedge reserve
The hedging reserve records the portion of the gain or loss on a hedging instrument in a cash flow hedge that is
determined to be an effective hedge relationship.
OTHER DISCLOSURES
This section provides information on items which require disclosure to comply with Australian Accounting Standards
and other regulatory pronouncements.
23. DEFERRED INCOME TAX
Accounting Policy
Deferred tax balances are determined using the balance sheet method, which provides for temporary differences at
the balance sheet date between accounting carrying amounts and the tax bases of assets and liabilities.
Deferred income tax liabilities are recognised for all taxable temporary differences, other than for the exemptions
permitted under accounting standards. At 30 June 2017 there are no unrecognised temporary differences associated
with the Group’s investment in subsidiaries (2016: $nil).
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent that it is probable that future taxable profits will be available to utilise
these deductible temporary differences. Deferred tax assets are reviewed at each reporting date and are reduced to
the extent that it is no longer probable that the related tax benefit will be realised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the temporary
differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting
date. Deferred tax assets and liabilities are only offset if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the
same taxation authority.
REGIS RESOURCES // 2017 ANNUAL REPORT Deferred income tax at 30 June relates to the following:
86
CONSOLIDATED
Deferred tax liabilities
Receivables
Inventories
Prepayments
Financial assets
Property, plant and equipment
Exploration and evaluation expenditure
Mine properties under development
Mine properties
Gross deferred tax liabilities
Set off of deferred tax assets
Net deferred tax liabilities
Deferred tax assets
Inventories
Property, plant and equipment
Trade and other payables
Provisions
Expenses deductible over time
Derivatives
Tax losses carried forward
Gross deferred tax assets
Set off of deferred tax assets
Net deferred tax assets
Reconciliation of deferred tax, net:
Opening balance at 1 July – net deferred tax assets/(liabilities)
Income tax (expense)/ benefit recognised in profit or loss
Income tax (expense)/benefit recognised in equity
Closing balance at 30 June – net deferred tax (liabilities)/ assets
KEY JUDGEMENTS
Recovery of deferred tax assets
2017
$’000
2,389
469
74
78
10,083
22,529
-
36,973
72,595
2016
$’000
2,752
-
47
2,892
-
14,922
360
25,007
45,980
(23,192)
(25,174)
49,403
20,806
-
-
940
14,763
8
31
7,450
23,192
2,114
2,339
892
11,569
31
214
8,015
25,174
(23,192)
(25,174)
-
-
(20,806)
(1,140)
(31,411)
(16,774)
2,814
(2,892)
(49,403)
(20,806)
Judgement is required in determining whether deferred tax assets are recognised on the balance sheet. Deferred
tax assets, including those arising from unutilised tax losses, require management to assess the likelihood that the
Group will generate taxable earnings in future periods, in order to utilise recognised deferred tax assets. Estimates
of future taxable income are based on forecast cash flows from operations and the application of existing tax laws
in Australia.
To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Group
to realise the net deferred tax assets recorded at the reporting date could be impacted. Additionally, future changes
in tax laws in Australia could limit the ability of the Group to obtain tax deductions in future periods.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) Tax consolidation
The Company and its wholly-owned Australian resident entities became part of a tax-consolidated group on 14
December 2006. As a consequence, all members of the tax-consolidation group are taxed as a single entity from that
date. The head entity within the tax-consolidation group is Regis Resources Limited.
87
The head entity, in conjunction with other members of the tax-consolidated group, have entered into a tax funding
arrangement which sets out the funding obligations of members of the tax-consolidated group in respect of tax
amounts. Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the
subsidiaries are assumed by the head entity and are recognised by the Company as intercompany receivables (or
payables). Contributions to fund the current tax liabilities are payable as per the tax funding arrangement and reflect
the timing of the head entity’s obligation to make payments for tax liabilities to the relevant tax authorities.
The Company recognises deferred tax assets arising from unused tax losses of the tax-consolidated group to the
extent that it is probable that future taxable profits of the tax-consolidated group will be available against which
asset can be utilised.
Any subsequent period adjustment to deferred tax assets arising from unused tax losses as a result of revised
assessments of the probability of recoverability is recognised by the head entity only.
The head entity in conjunction with other members of the tax-consolidated group has also entered into a tax sharing
agreement. The tax sharing agreement provides for the determination of the allocation of income tax liabilities
between the entities should the head entity default on its tax payment obligations. No amounts have been recognised
in the financial statements in respect of this agreement as payment of any amounts under the tax sharing agreement
is considered remote.
24. SHARE-BASED PAYMENTS
Accounting Policy
The value of options granted to employees is recognised as an employee expense, with a corresponding increase
in equity, over the period that the employees become unconditionally entitled to the options (the vesting period),
ending on the date on which the relevant employees become fully entitled to the option (the vesting date).
At each subsequent reporting date until vesting, the cumulative charge to the statement of comprehensive income
is the product of:
The grant date fair value of the option;
The current best estimate of the number of options that will vest, taking into account such factors as the likelihood
of employee turnover during the vesting period and the likelihood of non-market performance conditions being
met; and
The expired portion of the vesting period.
Until an option has vested, any amounts recorded are contingent and will be adjusted if more or fewer awards vest
than were originally anticipated to do so.
Recognised share-based payments expense
Employee share-based payments expense
Performance rights expense
Total expense arising from share-based payment transactions
CONSOLIDATED
2017
$’000
2,928
294
3,222
2016
$’000
3,317
-
3,317
There have been no cancellations or modifications to any of the plans during the current or prior years.
REGIS RESOURCES // 2017 ANNUAL REPORT Employee share option plan (ESOP)
88
The Company has one ESOP, being the Regis Resources Limited 2014 Share Option Plan (the “Option Plan”). The
objective of the Option Plan is to assist in the recruitment, reward, retention and motivation of eligible persons of
the Group. Under the Option Plan, the board or Remuneration, Nomination and Diversity Committee may issue eligible
employees with options to acquire shares in the future at an exercise price fixed by the board or Remuneration,
Nomination and Diversity Committee on grant of the options.
The vesting of all options is subject to service conditions being met whereby the recipient must meet the eligible
employee criteria as defined in the Option Plan.
Summary of options granted
The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of, and movements in,
share options issued during the year:
WAEP
$2.7956
$1.5121
$2.4520
$2.4000
$3.4884
$1.7125
$3.5000
2016
$2.91
2017
NO.
WAEP
2016
NO.
Outstanding at the beginning of the year
13,160,000
$1.7125
5,155,000
Granted during the year
-
-
10,705,000
Forfeited during the year
(1,035,000)
$1.7570
(1,020,000)
Exercised during the year
(2,680,000)
$2.3473
(275,000)
Expired during the year
-
-
(1,405,000)
Outstanding at the end of the year
9,445,000
$1.5274
13,160,000
Exercisable at the end of the year
-
-
572,500
Weighted average share price at the date of exercise
Weighted average remaining contractual life
Range of exercise prices
2017
$3.85
2.2 years
2.7 years
$1.40 - $2.70
$1.40 - $3.50
Weighted average fair value of options granted during the year
n/a
$0.7941
Option pricing model
The fair value of the equity-settled share options granted under the ESOP is estimated as at the date of grant using
a Black-Scholes option pricing model taking into account the terms and conditions upon which the options were
granted. There were no new grants of employee options during the year ended 30 June 2017. The following table lists
the inputs to the model used for the year ended 30 June 2016:
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Expected life of the option (years)
Option exercise price ($)
Weighted average share price at grant date ($)
2016 ESOP
2.91 - 4.27
84.73 – 103.38
1.57 – 2.15
2 – 3 years
1.40 – 2.70
1.41 – 3.19
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns
that may occur. The expected volatility reflects the assumption that historical volatility is indicative of future trends,
which may also not necessarily be the actual outcome.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) Performance Rights
In November 2016, 401,999 performance rights were granted to the executive directors, Mr Mark Clark and Mr
Paul Thomas, and other executives, Mr Kim Massey and Mr Peter Woodman under the Group’s Executive Incentive
Plan (“EIP”). The performance conditions that the Board has determined will apply to the Performance Rights are
summarised below:
89
TRANCHE
WEIGHTING
PERFORMANCE CONDITIONS
Tranche A
25% of the Performance Rights
The Company’s relative total shareholder return (“TSR”)
measured against the TSR’s of 18 comparator mining companies
Tranche B
25% of the Performance Rights
Tranche C
25% of the Performance Rights
The Company’s absolute TSR measured against specific
thresholds
The growth in the Company’s earnings per share (“EPS”)
measured against specific thresholds
Tranche D
25% of the Performance Rights
The growth in the Company’s Ore Reserve measured against
specific thresholds
The fair value at grant date of Tranches A and B was estimated using a Monte Carlo simulation, and a Black Scholes
option pricing model was used to estimate the fair value at grant date of Tranches C and D.
The table below details the terms and conditions of the grant and the assumptions used in estimating fair value:
ITEM
Grant date
Value of the underlying security at grant date
Exercise price
Dividend yield
Risk free rate
Volatility
Performance period (years)
Commencement of measurement period
Test date
Remaining performance period (years)
TRANCHE A & B
TRANCHE C & D
18 November 2016 18 November 2016
$2.740
nil
4.23%
1.75%
60%
2
$2.740
nil
4.23%
1.75%
60%
2
1 July 2016
1 July 2016
30 June 2018
30 June 2018
1.61
1.61
The weighted average fair value of the Performance Rights granted during the year was $1.90.
KEY ESTIMATES AND ASSUMPTIONS
Share-based payments
The Group is required to use key assumptions, such as volatility, in respect of the fair value models used in
determining share-based payments to employees in accordance with the requirements of AASB 2 Share–based
payment. The accounting estimates and assumptions relating to equity-settled share-based payments would have
no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact
expenses and equity.
REGIS RESOURCES // 2017 ANNUAL REPORT 25. RELATED PARTIES
90
Key management personnel compensation
The key management personnel compensation included in employee benefits expense (note 3) and share-based
payments (note 24), is as follows:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Termination benefits
Share-based payment
Total compensation
CONSOLIDATED
2017
$
2016
$
2,802,104
2,453,191
159,410
212,867
-
214,593
188,718
216,771
2,030,994
1,708,649
5,205,375
4,781,922
Individual directors and executives compensation disclosures
Information regarding individual directors’ and executives’ compensation and equity instrument disclosures required
by s300A of the Corporations Act and Corporations Regulations 2M.3.03 are provided in the Remuneration Report
section of the Directors’ Report.
No director has entered into a material contract with the Group either in the current or prior financial year and there
were no material contracts involving directors’ interests existing at year end.
Subsidiaries
The consolidated financial statements include the financial statements of Regis Resources Limited and the
subsidiaries listed in the following table:
NAME
COUNTRY OF
INCORPORATION
% EQUITY INTEREST
INVESTMENT $’000
2017
2016
2017
2016
Duketon Resources Pty Ltd
Australia
Artane Minerals NL
Australia
Rosemont Gold Mines Pty Ltd
Australia
LFB Resources NL
Australia
100%
100%
100%
100%
100%
100%
100%
100%
30,575
30,575
-
-
44,110
74,685
-
-
44,110
74,685
Ultimate parent
Regis Resources Limited is the ultimate Australian parent entity and the ultimate parent entity of the Group.
Transactions with related parties
A loan is made by the Company to Duketon Resources and represents the subsidiary’s share of payments for
exploration and evaluation expenditure on commercial joint ventures existing between the Company and Duketon
Resources. The loan outstanding between the Company and Duketon Resources has no fixed date of repayment and
is non-interest-bearing. As at 30 June 2017, the balance of the loan receivable was $24,157,000 (2016: $17,298,000).
A loan is made by the Company to LFB Resources and represents the subsidiary’s share of payments for exploration
and evaluation expenditure. The loan outstanding between the Company and LFB Resources has no fixed date of
repayment and is non-interest-bearing. As at 30 June 2017, the balance of the loan receivable was $38,775,000 (2016:
$25,481,000).
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) Transactions with key management personnel
From the date of her appointment as a director, services totalling $335,302 have been provided on normal commercial
terms to the Group by Mintrex Pty Ltd, of which Ms Morgan is a managing director, chief executive officer and a
shareholder. There was no outstanding balance payable as at 30 June 2017.
91
Other than the ordinary accrual of personnel expenses at balance date and transactions disclosed above, there are
no other amounts receivable from and payable to key management personnel and their related parties.
26. PARENT ENTITY INFORMATION
The following details information related to the parent entity, Regis Resources Limited, at 30 June 2017. The
information presented here has been prepared using consistent accounting policies as detailed in the relevant
notes of this report.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Issued capital
Share-based payment reserve
Retained profits
Total equity
Net profit for the year
Other comprehensive income for the period
Total comprehensive income for the period
CONSOLIDATED
2017
$’000
190,919
518,194
2016
$’000
162,751
458,108
709,113
620,859
51,984
85,933
137,917
49,957
56,590
106,547
431,491
431,335
26,876
112,829
571,196
28,574
54,403
514,312
138,503
112,184
(4,920)
6,747
133,583
118,931
The parent entity has not guaranteed any loans of its subsidiaries.
There are no contingent assets or liabilities of the Group or parent entity at 30 June 2017 as disclosed at note 28.
All commitments are commitments incurred by the parent entity, except for $1,351,000 (2016: $1,827,000) of the
exploration expenditure commitments disclosed at note 12, and $35,000 (2016: $56,000) of the operating lease
commitments disclosed at note 27.
REGIS RESOURCES // 2017 ANNUAL REPORT 27. COMMITMENTS
92
Operating lease commitments – Group as lessee
The Group leases office premises in Perth, WA and Blayney, NSW under normal commercial lease arrangements. The
Perth office lease was entered into for an initial period of 5 years beginning 1 May 2010 and was renewed for a further
5 year period during the prior year. The Group is under no legal obligation to renew the lease once the extended
lease term has expired. The Blayney lease is for a period of 3 years beginning 22 February 2013 and was renewed for
a further 3 year period during the current year.
Future minimum rentals payable under non-cancellable operating leases at 30 June are as follows:
Within one year
Between one and five years
Total minimum lease payments
CONSOLIDATED
2017
$’000
373
683
1,056
2016
$’000
358
1,040
1,398
Finance lease commitments - Group as lessee
The Group has entered into hire purchase contracts for the purchase of three Komatsu loaders. The contracts expire
on 29 May 2018, 27 May 2019 and 4 July 2019 and ownership of the loaders passes to the Group once all contractual
payments have been made. (30 June 2016: 29 May 2018).
Within one year
Between one and five years
Total minimum lease payments
Less amounts representing finance charges
Present value of minimum lease payments
Included in the financial statements as:
Current interest-bearing liabilities
Non-current interest-bearing liabilities
NOTE
CONSOLIDATED
2017
$’000
1,558
856
2,414
(67)
2,347
1,506
841
2,347
2016
$’000
1,194
1,522
2,716
(106)
2,610
1,125
1,485
2,610
Carrying value of leased assets included in plant and equipment
11
3,425
3,008
Contractual commitments
On 19 January 2010, the Group entered into an agreement with Pacific Energy (KPS) Pty Ltd (“KPS”) for the supply of
electricity to the Moolart Well Gold Mine. The terms of this agreement commit the Group to purchasing a fixed amount
of electricity per month for six years from 7 July 2010 (the “Effective Date”) at a price which will be reviewed annually.
As at 30 June 2017, the Group had nil commitments to purchase electricity as the new contract is being negotiated.
(30 June 2016: $135,000).
On 23 June 2011, the Group entered into an agreement with Pacific Energy (KPS) Pty Ltd (“KPS”) for the supply of
electricity to the Garden Well Gold Mine. The terms of this agreement commit the Group to purchasing a fixed
amount of electricity per month for 5 years from 1 September 2012 (the “Effective Date”) at a price which will be
reviewed annually. The agreement was amended, effective 1 October 2013, to incorporate Rosemont Gold Mine’s
power requirements. As at 30 June 2017, at the current contract price, the Group had commitments to purchase
electricity for the remaining term of $762,000 (30 June 2016: $5,335,000).
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) 28. CONTINGENCIES
As at 30 June 2017, the Group did not have any contingent assets or liabilities (30 June 2016: nil).
93
29. AUDITOR’S REMUNERATION
Audit services
KPMG Australia
CONSOLIDATED
2017
$
2016
$
Audit and review of financial statements
217,299
209,218
Other services
IT advisory services
Taxation compliance services
Total auditor’s remuneration
30. SUBSEQUENT EVENTS
Option issue
15,888
6,509
-
-
239,696
209,218
On 5 July 2017, 1,790,000 unlisted employee options were granted under the Regis Resources Employee Share Option
Plan. The options are exercisable on or before 1 July 2021 at an exercise price of $3.90.
Share issue
Subsequent to year end, 762,250 shares have been issued as a result of the exercise of employee options for proceeds
of $234,500.
Dividends
On 28 August 2017, the directors proposed a final dividend on ordinary shares in respect of the 2017 financial year.
Refer to note 6.
Other than the matters discussed above, there has not arisen in the interval between the end of the financial year
and the date of this Report any item, transaction or event of a material and unusual nature which, in the opinion of
the directors of the Group, has significantly affected or is likely to significantly affect the operations of the Group; the
results of those operations; or the state of affairs of the Group in future financial years.
31. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS
Changes in accounting policy
The Group has adopted the following new and revised accounting standards, amendments and interpretations as of
1 July 2016:
AASB 2014-3 Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in Joint
Operations
AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation
and Amortisation
AASB 2015-1 Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting
Standards 2012-2014 Cycle
AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101
The adoption of these new and revised standards did not have a material impact on the Group’s financial statements.
REGIS RESOURCES // 2017 ANNUAL REPORT New standards and interpretations issued but not yet effective
94
The following standards, amendments to standards and interpretations have been identified as those which may
impact the entity in the period of initial application. They are available for early adoption at 30 June 2017, but have
not been applied in preparing this financial report. Except where noted, the Group has evaluated the impact of the
new standards and interpretations listed below and determined that the changes are not likely to have a material
impact on its financial statements.
AASB 2016-1 Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for
Unrealised Losses
This standard makes amendments to AASB 112 Income Taxes to clarify the accounting for deferred tax assets for
unrealised losses on debt instruments measured at fair value.
Application date of Standard:
1 January 2017
Application date for Group:
1 July 2017
AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107
The amendments to AASB 107 Statement of Cash Flows are part of the IASB’s Disclosure Initiative and help users of
financial statements better understand changes in an entity’s debt. The amendments require entities to provide
disclosures about changes in their liabilities arising from financing activities, including both changes arising from
cash flows and non-cash changes (such as foreign exchange gains or losses).
Application date of Standard:
1 January 2017
Application date for Group:
1 July 2017
AASB 15 Revenue from Contracts with Customers
AASB 15 replaces all existing revenue requirements in Australian Accounting Standards (AASB 111 Construction
Contracts, AASB 118 Revenue, AASB Interpretation 13 Customer Loyalty Programmes, AASB Interpretation 15
Agreements for the Construction of Real Estate, AASB Interpretation 18 Transfers of Assets from Customers and AASB
Interpretation 131 Revenue – Barter Transactions Involving Advertising Services) and applies to all revenue arising
from contracts with customers, unless the contracts are in the scope of other standards, such as AASB 117 (or AASB
16 Leases, once applied).
AASB 15 establishes a five step model to account for revenue in a way that depicts the transfer of promised goods
or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in
exchange for those goods or services. Under AASB 15 the revenue recognition model will change from one based on
the transfer of risk and reward of ownership to the transfer of control of ownership.
The Group has evaluated the impact of the new standard and determined that the changes are not likely to have a
material impact on the amount of revenue recognised from gold sales, nor is it expected that significant changes to
disclosures will be required. The Group is assessing the impact of the new rules on the timing of revenue recognition
where recognition of gold sales revenue will depend on the passing of control rather than the passing of risks and
rewards.
Application date of Standard:
1 January 2018*
Application date for Group:
1 July 2018
*Early application is permitted.
AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture
The amendments clarify that a full gain or loss is recognised when a transfer to an associate or joint venture involves
a business as defined in AASB 3 Business Combinations. Any gain or loss resulting from the sale or contribution of
assets that does not constitute a business, however, is recognised only to the extent of unrelated investors’ interests
in the associate or joint venture.
AASB 2015-10 defers the mandatory effective date (application date) of AASB 2014-10 so that the amendments are
required to be applied for annual reporting periods beginning on or after 1 January 2018 instead of 1 January 2016.
Application date of Standard:
1 January 2018
Application date for Group:
1 July 2018
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) AASB 2016-5 Amendments to Australian Accounting Standards – Classification and Measurement of Share-
based Payment Transactions
This standard amends AASB 2 Share-based Payment, clarifying how to account for certain types of share-based
payment transactions. The amendments provide requirements on the accounting for:
95
The effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments
Share-based payment transactions with a net settlement feature for withholding tax obligations
A modification to the terms and conditions of a share-based payment that changes the classification of the
transaction from cash-settled to equity-settled.
Application date of Standard:
1 January 2018
Application date for Group:
1 July 2018
AASB 16 Leases
AASB 16 requires lessees to account for all leases under a single on-balance sheet model in a similar way to finance
leases under AASB 117 Leases. The standard includes two recognition exemptions for lessees – leases of ‘low-value’
assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the
commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and
an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset).
Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation
expense on the right-of-use asset.
Lessees will be required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in
the lease term, a change in future lease payments resulting from a change in an index or rate used to determine
those payments). The lessee will generally recognise the amount of the re-measurement of the lease liability as an
adjustment to the right-of-use asset.
Lessor accounting is substantially unchanged from today’s accounting under AASB 117. Lessors will continue to
classify all leases using the same classification principle as in AASB 117 and distinguish between two types of leases:
operating and finance leases.
The standard will primarily affect the accounting for the Group’s operating leases. As at the reporting date, the Group
has non-cancellable operating lease commitments of $1.1 million, see note 27. To date, work has focussed on the
identification of the provisions of the standard which will most impact the Group. In the year ended 30 June 2018,
work on the issues and their resolution will continue including a detailed review of contracts and their financial
reporting impacts.
Some of these commitments may be covered by the exception for short-term and low-value leases and some
commitments may relate to arrangements that will not qualify as leases under AASB 16. Given the Group’s current
level of exposure, the impact of adoption of AASB 16 on the financial statements is not expected to be material.
Application date of Standard:
1 January 2019
Application date for Group:
1 July 2019
IFRIC 23 Uncertainty over Income Tax Treatments
The Interpretation clarifies the application of the recognition and measurement criteria in IAS 12 Income Taxes when
there is uncertainty over income tax treatments. The Interpretation specifically addresses the following:
Whether an entity considers uncertain tax treatments separately.
The assumptions an entity makes about the examination of tax treatment by taxation authorities.
How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates.
How an entity considers changes in facts and circumstances.
Application date of Standard:
1 January 2019
Application date for Group:
1 July 2019
REGIS RESOURCES // 2017 ANNUAL REPORT DIRECTORS’ DECLARATION
96
In accordance with a resolution of the directors of Regis Resources Limited, I state that:
1.
In the opinion of the directors:
(a) The financial statements, notes and additional disclosures included in the directors’ report designated
as audited, of the Company and the consolidated entity are in accordance with the Corporations Act 2001,
including:
(i) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2017 and of its
performance for the financial year ended on that date; and
(ii) Complying with Accounting Standards and the Corporations Regulations 2001; and
(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
2. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the
Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2017.
3. The directors draw attention to the notes to the consolidated financial statements, which include a statement of
compliance with International Financial Reporting Standards.
On behalf of the board
Mr Mark Clark
Executive Chairman
Perth, 28 August 2017
REGIS RESOURCES // 2017 ANNUAL REPORT INDEPENDENT AUDITOR’S REPORT
97
Independent Auditor’s Report
To the shareholders of Regis Resources Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of Regis
Resources Limited.
In our opinion, the accompanying Financial
Report of Regis Resources Limited is in
accordance with the Corporations Act 2001,
including
• giving a true and fair view of the Group’s
financial position as at 30 June 2017 and of
its financial performance for the year ended
on that date; and
•
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
The Financial Report comprises the:
• Consolidated balance sheet as at 30 June
2017
• Consolidated statement of comprehensive
income, consolidated statement of changes
in equity and consolidated statement of cash
flows for the year then ended
• Notes including a summary of significant
accounting policies
• Directors’ Declaration
The Group consists of Regis Resources Limited
(the Company) and the entities it controlled at
the year end and from time to time during the
financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Company in accordance with the Corporations Act 2001 and the relevant
ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code
of Ethics for Professional Accountants (the Code). We have fulfilled our other ethical responsibilities
in accordance with the Code.
Key Audit Matters
The Key Audit Matters we identified are:
• Valuation and classification of low grade ore
stockpiles
• Valuation of exploration and evaluation
assets
Key Audit Matters are those matters that, in our
professional judgment, were of most
significance in our audit of the Financial Report of
the current period.
These matters were addressed in the context of
our audit of the Financial Report as a whole, and
in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Profession Standards Legislation.
REGIS RESOURCES // 2017 ANNUAL REPORT
98
Valuation and classification of low grade ore stockpiles
AU $35,452 thousand
Refer to Note 10 to the financial report
The key audit matter
How the matter was addressed in our audit
Significant judgment is required to be exercised
by management in assessing the value and
classification of low grade ore stockpiles which
will be used to produce gold bullion in the
future.
The valuation and classification of low grade ore
stockpiles is a key audit matter because:
• Additional low grade stockpiles have
been created following the
commencement of mining activities at
new ore deposits; and
• Significant judgment is required by us
in evaluating and challenging the
Group’s assessment.
The Group’s assessment is based on a model
which estimates future revenue expected to be
derived from gold contained in the low grade
ore stockpiles, less selling costs and future
processing costs to convert stockpiles into gold
bullion. We placed particular focus on those
judgments listed below which impact the
valuation and classification of ore stockpiles:
•
•
•
Forecast processing costs of low grade ore
stockpiles.
Forecast quantity of gold contained within
the low grade ore stockpiles.
Future commodity prices expected to
prevail when the gold from existing low
grade ore stockpiles is processed and sold.
• Estimated timing of conversion of low
grade ore stockpiles into gold bullion, which
drives the classification of low grade ore
stockpiles as current or non-current assets.
For this key audit matter, our procedures
included:
•
Testing the Group’s key controls around
inventory reconciliations which utilise
underlying data such as production and
processing costs, geological survey reports,
mill production reports and metallurgical
survey reports.
• Assessing the methodology and key
assumptions in the Group’s model used to
determine the value of low grade ore
stockpiles by:
•
•
•
comparing forecast processing costs to
previous actual costs, and for
consistency with management’s latest
life of mine plan, and our knowledge of
industry trends
comparing forecast quantity of gold
contained within stockpiles to
management’s geological survey results
and historical trends
comparing commodity prices to
published external analysts’ data for
prices expected to prevail in the future
• Critically evaluating the Group’s classification
of low grade ore stockpiles as current/non-
current by assessing the estimated timing of
processing the stockpiles against the
Group’s latest life of mine plan and the
historical operating capacity of the Group’s
processing plants.
REGIS RESOURCES // INDEPENDENT AUDITOR’S REPORT (continued)
99
Valuation of exploration and evaluation (“E&E”) assets
AU $151,735 thousand
Refer to Note 12 to the financial report
The key audit matter
How the matter was addressed in our audit
Our audit procedures included:
• We tested the Group’s compliance with
minimum expenditure requirements for a
sample of exploration licenses
• We obtained corporate budgets which we
compared for consistency to areas of interest
with capitalised E&E, for evidence of the ability
to fund the continuation of activities
• We compared the documentation from the
sources listed below for information regarding
the results of activities, the potential for
commercially viable quantities of reserves to
exist and for the Group’s intentions to
continue activities in relation to certain areas of
interest. We corroborated this through
interviews of key operational and finance
personnel
•
Internal management plans
• Minutes of board meetings
• Reports lodged with relevant government
authorities
• Announcements made by the Group to the
ASX
• Draft and final commercial arrangements
for securing water sources for the
McPhillamys project.
The valuation of E&E assets is a key audit
matter due to:
•
•
the significance of the E&E balance (being
22% of the Group’s total assets); and
the greater level of audit effort to evaluate
the Group’s application of the
requirements of the industry specific
accounting standard AASB 6 Exploration
for and Evaluation of Mineral Resources,
in particular the presence of impairment
indicators. The presence of impairment
indicators would necessitate a detailed
analysis by the Group of the value of E&E,
therefore given the criticality of this to the
scope and depth of our work, we involved
senior team members to challenge the
Group’s determination that no such
indicators existed.
In assessing the presence of impairment
indicators, we focused on those that may
draw into question the commercial
continuation of E&E activities for areas of
interest within the Duketon region of WA as
well as the McPhillamys project of NSW
where significant capitalised E&E exists. In
performing the assessments above, we paid
particular attention to:
• The Group’s compliance with key license
conditions to maintain current rights to
tenure for an area of interest, particularly
minimum expenditure requirements
• The ability of the Group to fund the
continuation of activities for all areas of
interest
• Results from latest activities regarding the
potential for a commercially viable
quantity of reserves and the Group’s
intention to continue E&E activities in
each area of interest as a result. This
includes the Group’s progress in securing
a viable water source required for mining
operations at McPhillamys
REGIS RESOURCES // 2017 ANNUAL REPORT
100
Other Information
Other Information is financial and non-financial information in Regis Resources Limited’s annual
reporting which is provided in addition to the Financial Report and the Auditor’s Report. The
Directors are responsible for the Other Information.
The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’
Report. The remaining Other Information, which includes the Chairman’s Report, Corporate,
Duketon Gold Project, Gold Exploration, Gold Reserves & Resources and Additional ASX information
is expected to be made available to us after the date of the Auditor's Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, the
auditor does not express any form of assurance conclusion thereon, with the exception of the
Remuneration Report.
In connection with our audit of the Financial Report, our responsibility is to read the Other
Information. In doing so, we consider whether the Other Information is materially inconsistent with
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001;
•
implementing necessary internal control to enable the preparation of a Financial Report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error;
and
• assessing the Group’s ability to continue as a going concern. This includes disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting
unless they either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of this Financial Report.
A further description of our responsibilities for the Audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_files/ar2.pdf. This description forms part of our Auditor’s Report.
REGIS RESOURCES // INDEPENDENT AUDITOR’S REPORT (continued)
101
Report on the Remuneration Report
Opinion
In our opinion, the Remuneration Report of
Regis Resources Limited for the year ended
30 June 2017, complies with Section 300A of
the Corporations Act 2001.
Director’s responsibilities
The Directors of the Company are responsible for
the preparation and presentation of the
Remuneration Report in accordance with Section
300A of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report
included in the Director’s report for the year ended
30 June 2017.
Our responsibility is to express an opinion on the
Remuneration Report, based on our Audit
conducted in accordance with Australian Auditing
Standards.
KPMG
R Gambitta
Partner
Perth
28 August 2017
REGIS RESOURCES // 2017 ANNUAL REPORT
102
ASX ADDITIONAL
INFORMATION
As at 18 September 2017 the following information applied:
1. SECURITIES
(a) Fully Paid Ordinary Shares
The number of holders of fully paid ordinary shares in the Company is 7,479. On a show of hands every holder of
fully paid ordinary shares present or by proxy, shall have one vote. Upon a poll, each share shall have one vote. The
distribution of holders of fully paid ordinary shares is as follows:
CATEGORY
Holding between
Holding between
Holding between
Holding between
1 - 1,000 Shares
1,001 - 5,000 Shares
5,001 - 10,000 Shares
10,001 - 100,000 Shares
Holding more than
100,001 Shares
Holding less than
A marketable parcel
NUMBER OF
SHAREHOLDERS
NUMBER OF
SHARES
2,426
2,997
1,030
922
104
1,126,830
8,242,538
7,963,525
24,380,329
462,189,392
7,479
503,902,614
458
11,629
The Company’s fully paid ordinary shares are quoted on the Australian Securities Exchange using the code RRL.
The top 20 shareholders are as follows:
NAME
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
ROLLASON PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED–GSCO ECA
BNP PARIBAS NOMINEES PTY LTD
AMP LIFE LIMITED
NUMBER OF FULLY
PAID ORDINARY
SHARES HELD
199,685,931
80,719,862
64,315,073
31,116,984
11,965,347
7,500,445
5,950,000
4,693,309
4,024,000
2,569,824
HSBC CUSTODY NOMINEEES (AUSTRALIA) LIMITED
2,565,622
SHL PTY LTD
2,500,000
PERCENTAGE
INTEREST
39.63%
16.02%
12.76%
6.18%
2.37%
1.49%
1.18%
0.93%
0.80%
0.51%
0.51%
0.50%
REGIS RESOURCES // 2017 ANNUAL REPORT NAME
NATIONAL NOMINEES LIMITED
ROLLASON PTY LTD
MR MARK JOHN CLARK
BAINPRO NOMINEES PTY LIMITED
MUTUAL INVESTMENT PTY LTD
SBN NOMINEES PTY LIMITED <10004 ACCOUNT>
ECAPITAL NOMINEES PTY LIMITED
CITICORP NOMINEES PTY LIMITED
NUMBER OF FULLY
PAID ORDINARY
SHARES HELD
PERCENTAGE
INTEREST
103
2,451,252
2,389,671
2,387,274
2,386,351
2,000,000
1,768,000
1,706,858
1,485,747
0.49%
0.47%
0.47%
0.47%
0.40%
0.35%
0.34%
0.29%
TOP 20 SHAREHOLDERS OF ORDINARY FULLY PAID SHARES (TOTAL)
434,181,550
86.16%
(b) Unlisted options
UNLISTED OPTIONS OVER FULLY PAID ORDINARY SHARES
Expiry 14 October 2018
Expiry 11 August 2019
Expiry 6 January 2020
Expiry 13 May 2020
Expiry 1 July 2021
NUMBER OF
HOLDERS
NUMBER OF
OPTIONS HELD
1
129
1
1
12
25,000
4,455,000
1,000,000
200,000
1,790,000
Option holders may attend and speak at general meetings of the Company. However, they do not have an entitlement
to vote upon the business before the meeting either by show of hands or by poll.
(c) Unlisted performance rights
PERFORMANCE RIGHTS ISSUED UNDER EMPLOYEE INCENTIVE SCHEME
Unvested 2016 performance rights (Test date: 30 June 2018)
NUMBER OF
HOLDERS
NUMBER OF
RIGHTS HELD
4
401,999
Performance rights do not carry a right to vote. Voting rights will be attached to the unissued shares when the
performance rights have been exercised.
2. SUBSTANTIAL SHAREHOLDERS
The substantial shareholders as disclosed in substantial shareholder notices received by the Company are:
NAME
Van Eck Associates Corporation
Vinva Investment Management
3. ON-MARKET BUY-BACK
There is no current on-market buy-back of the Company’s securities.
4. CORPORATE GOVERNANCE STATEMENT
NUMBER OF FULLY
PAID ORDINARY
SHARES HELD
PERCENTAGE
INTEREST
52,916,826
10.56%
25,615,451
5.11%
The Company’s 2017 Corporate Governance Statement has been released as a separate document and is located on
our website at http://www.regisresources.com.au/about-us/corporate-governance.html
REGIS RESOURCES // 2017 ANNUAL REPORT 5. MINERAL RESOURCES AND ORE RESERVES
104
The JORC compliant Group Mineral Resources (inclusive of Ore Reserves) as at 31 March 2017 are estimated to be
268.0 million tonnes at 0.93g/t Au for 8.05 million ounces of gold compared with the estimate at 31 March 2016 of 261.7
million tonnes at 0.95g/t Au for 8.01 million ounces of gold.
The change in the Group Mineral Resources is primarily due to the addition of Tooheys Well.
Group Mineral Resource
0.33
0.25
0.63
8.01
8.05
s
e
c
n
u
O
n
o
i
l
l
i
M
9
8
7
6
5
4
3
2
1
0
31 Mar 16
Depletion
Model Update New Deposits
31 Mar 17
Mineral Resources are reported inclusive of Ore Reserves and include all exploration and resource definition drilling
information, where practicable, up to 31 March 2017 and have been depleted for mining to 31 March 2017.
Duketon Ore Reserve
3
Mineral Resources are constrained by optimised open pit shells developed with operating costs and a long term gold
price assumption of A$2,000 per ounce for the purpose of satisfying “reasonable prospects for eventual extraction”
(JORC 2012).
2
s
e
c
n
u
O
n
o
M
1
Duketon Ore Reserves
0.33
0.02
0.37
The JORC compliant Duketon Ore Reserves as at 31 March 2017 are estimated at 59.3 million tonnes at 1.14g/t Au for
2.18 million ounces of gold, compared with the estimate at 31 March 2016 of 60.8 million tonnes at 1.09g/t Au for 2.13
million ounces of gold.
2.18
2.13
i
l
l
i
The change in the Duketon Ore Reserve from March 2016 to March 2017 is as follows:
TOTAL ORE RESERVE
0
31 Mar 16
Depletion
31 March 2016
Depleted by Mining to 31 March 2017
31 March 2016 Net of Depletion
31 March 2017
% Variation net of Depletion
Model Update New Deposits
TONNES
(Mt)
31 Mar 17
60.8
(9.6)
51.2
59.3
13%
GOLD GRADE
(g/t)
GOLD METAL
(koz)
1.09
1.07
1.09
1.14
2,125
(331)
1,794
2,182
18%
The re-estimation of Duketon Ore Reserves resulted in a 13% increase in tonnes and 18% increase in ounces after
allowing for depletion by mining. This was primarily the result of:
The inclusion of maiden Ore Reserve from Tooheys Well;
a review of current pit design parameters including costs, metallurgical and geotechnical performance of mining
projects to date; and
the inclusion of further drilling results, particularly at Gloster.
REGIS RESOURCES // ASX ADDITIONAL INFORMATION (continued)
Group Mineral Resource
0.33
0.25
0.63
8.01
8.05
31 Mar 16
Depletion
Model Update New Deposits
31 Mar 17
Duketon Ore Reserve
105
0.33
0.02
0.37
2.13
2.18
s
e
c
n
u
O
n
o
i
l
l
i
M
s
e
c
n
u
O
n
o
i
l
l
i
M
9
8
7
6
5
4
3
2
1
0
3
2
1
0
31 Mar 16
Depletion
Model Update New Deposits
31 Mar 17
A long term gold price of A$1,400 per ounce was used in Ore Reserve pit optimisations. Ore Reserves have been
depleted for mining to 31 March 2017.
Garden Well
The Garden Well JORC compliant Mineral Resource as at 31 March 2017 is 70.1 million tonnes at 0.82g/t Au for 1.84
million ounces, compared to 75.8 million tonnes at 0.88g/t Au for 2.14 million ounces at 31 March 2016.
The Garden Well JORC compliant Ore Reserve as at 31 March 2017 is 23.7 million tonnes at 0.88g/t Au for 0.67 million
ounces, compared to 28.8 million tonnes at 0.89g/t Au for 0.83 million ounces at 31 March 2016.
The change in the Garden Well Ore Reserve from March 2016 to March 2017 is as follows:
31 March 2016
Depleted by Mining to 31 March 2017
31 March 2016 Net of Depletion
31 March 2017
% Variation Net of Depletion
TOTAL ORE RESERVE - GARDEN WELL
TONNES
(Mt)
GOLD GRADE
(g/t)
GOLD METAL
(koz)
28.8
(4.3)
24.5
23.7
(3%)
0.89
0.94
0.88
0.88
827
(131)
696
669
(3%)
The re-optimisation and subsequent pit redesign at Garden Well resulted in a 3% decrease in tonnes and 3% decrease
in ounces after allowing for depletion by mining. This was primarily the result of a change in geotechnical parameters
on the east wall resulting in the base of the pit design lifting slightly.
REGIS RESOURCES // 2017 ANNUAL REPORT
Rosemont
106
The Rosemont JORC compliant Mineral Resource as at 31 March 2017 is 24.7 million tonnes at 1.34g/t Au for 1.07 million
ounces, compared to 28.0 million tonnes at 1.48g/t Au for 1.33 million ounces at 31 March 2016.
The Rosemont JORC compliant Ore Reserve as at 31 March 2017 is 9.7 million tonnes at 1.42g/t Au for 0.44 million
ounces, compared to 11.6 million tonnes at 1.51g/t Au for 0.56 million ounces at 31 March 2016. The change in the
Rosemont Ore Reserve from March 2016 to March 2017 is as follows:
31 March 2016
Depleted by Mining to 31 March 2017
31 March 2016 Net of Depletion
31 March 2017
% Variation Net of Depletion
TOTAL ORE RESERVE - ROSEMONT
TONNES
(Mt)
GOLD GRADE
(g/t)
GOLD METAL
(koz)
11.6
(2.2)
9.4
9.7
2%
1.51
1.49
1.51
1.42
564
(107)
458
442
(3%)
The re-optimisation and subsequent pit redesign at Rosemont resulted in a 2% increase in tonnes and 3% decrease
in ounces after allowing for depletion by mining, primarily due to the inclusion of further drilling results.
Moolart Well
The Moolart Well JORC compliant Mineral Resource as at 31 March 2017 is 34.5 million tonnes at 0.73g/t Au for 0.81
million ounces, compared to 36.1 million tonnes at 0.71g/t Au for 0.82 million ounces at 31 March 2016.
The Moolart Well JORC compliant Ore Reserve as at 31 March 2017 is 2.8 million tonnes at 0.92g/t Au for 0.08 million
ounces, compared to 4.8 million tonnes at 0.93g/t Au for 0.14 million ounces at 31 March 2016. The change in the
Moolart Well Ore Reserve from March 2016 to March 2017 is as follows:
31 March 2016
Depleted by Mining to 31 March 2017
31 March 2016 Net of Depletion
31 March 2017
% Variation Net of Depletion
TOTAL ORE RESERVE - MOOLART WELL
TONNES
(Mt)
GOLD GRADE
(g/t)
GOLD METAL
(koz)
4.8
(2.1)
2.8
2.8
0%
0.93
0.92
0.93
0.92
144
(61)
83
83
0%
The re-optimisation and subsequent pit redesign at Moolart resulted in no change for tonnes or ounces after allowing
for depletion by mining.
Duketon Satellite Deposits
The combined JORC compliant Mineral Resource for Duketon satellite deposits as at 31 March 2017 is 65.7 million
tonnes at 1.01g/t Au for 2.14 million ounces, compared to 48.7 million tonnes at 0.96g/t Au for 1.50 million ounces at
31 March 2016.
The material change in total Mineral Resource ounces for the combined Duketon satellite deposits are as follows:
Tooheys Well:
Maiden Mineral Resource estimate and subsequent Mineral Resource estimate from infill drilling update during
the year.
Gloster:
Mineral Resource has been updated utilising new drilling completed by Regis Resources in the past year.
The combined JORC compliant Ore Reserve for Duketon satellite deposits as at 31 March 2017 is 23.2 million tonnes at
1.32g/t Au for 0.99 million ounces, compared to 15.5 million tonnes at 1.18g/t Au for 0.59 million ounces at 31 March 2016.
REGIS RESOURCES // ASX ADDITIONAL INFORMATION (continued)
The change in the combined satellite deposits Ore Reserve from March 2016 to March 2017 is as follows:
31 March 2016
Depleted by Mining to 31 March 2017
31 March 2016 Net of Depletion
31 March 2017
% Variation net of Depletion
TOTAL ORE RESERVE - SATELLITE DEPOSITS
107
TONNES
(Mt)
GOLD GRADE
(g/t)
GOLD METAL
(koz)
15.5
(1.0)
14.5
23.2
56%
1.18
1.03
1.19
1.32
590
(33)
557
987
73%
There has been a 56% increase in tonnes and 73% increase in ounces at the Duketon satellite deposits. This was
primarily the result of the inclusion of a maiden Ore Reserve estimate based on the revised Mineral Resource
estimate for Tooheys Well (refer to separate ASX announcement on 6 June 2017).
McPhillamys
The McPhillamys JORC compliant Mineral Resource at 31 March 2017 is 73.2 million tonnes at 0.94g/t Au for 2.21 million
ounces, unchanged from 31 March 2015. Infill drilling conducted over the last 9 months lead to an updated Mineral
Resource estimate on 8 September 2017 of 68.9 million tonnes at 1.04g/t Au for 2.31 million ounces. This update is a
5.9% reduction in ore tonnes, a 10.6% increase in ore grade for an overall increase in ounces of 4.4%.
A maiden Ore Reserve Estimate of 60.1 million tonnes at 1.05g/t AU for 2.03 million ounces was also announced on 8
September 2017 for the McPhillamys Gold Project (MGP). Regis has undertaken studies to a pre-feasibility level into
the development of the MGP. The project study considers Regis' intention to develop, construct and operate a 7.0
Mtpa open pit gold mine including the process facility and supporting infrastructure. The study has been prepared in
conjunction with Cube Consultants Pty Ltd (Cube) and Mintrex Pty Ltd (Mintrex). The study assesses the technical and
financial viability of the project to a PFS level and supports the estimation of a JORC compliant maiden Ore Reserve.
Work will continue towards completion of a Definitive Feasibility Study (DFS) in the December 2017 quarter.
Regis has also recently announced the execution of a non-binding heads of agreement with Centennial Coal Company
Limited and Energy Australia Pty Ltd (refer separate ASX announcement 4th July 2017) to utilise water from the
Mt Piper Power Station and Springvale Mine near Lithgow. Regis also has a second water option in contractually
securing ~4.5GLpa of water through long term lease and acquisition of unused Water Access Licenses over ground
water allocations in a zone of the Lachlan catchment approximately 80km from McPhillamys.
Governance Arrangements & Internal Controls
Regis has put in place governance arrangements and internal controls with respect to its estimates of Mineral
Resources and Ore Reserves and the estimation process, including:
oversight and approval of each annual statement by responsible senior officers;
establishment of internal procedures and controls to meet JORC Code 2012 compliance in all external reporting;
independent review of new and materially changed estimates;
annual reconciliation with internal planning to validate reserve estimates for operating mines; and
board approval of new and materially changed estimates.
REGIS RESOURCES // 2017 ANNUAL REPORT
108
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REGIS RESOURCES // ASX ADDITIONAL INFORMATION (continued)
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E
REGIS RESOURCES // 2017 ANNUAL REPORT
Group Ore Reserves Lower Cut
110
Reserves as at 31 March 2017
PROJECT
Garden Well
PROFILE
Alluvial
DOMAIN
LOWER CUT (g/t)
Oxide, Transitional, Fresh
Ultramafic
Chert
Low Recovery Chert and Shale
Rosemont
Moolart Well
Erlistoun
All
All
All
Dogbolter
Oxide
Transitional
Fresh
Petra
Oxide, Transitional
Fresh
Anchor
Oxide, Transitional
Gloster
Baneygo
Tooheys Well
McPhillamys
Fresh
All
Oxide, Transitional
Fresh
Oxide
Transitional
Fresh
Fresh
All
Competent Persons Statement
Sediments
Other
Sediments
Other
Low Recovery
0.4
0.4
0.5
0.8
0.4
0.4
0.5
0.5
0.6
0.5
0.7
0.6
0.5
0.6
0.5
0.6
0.5
0.4
0.5
0.5
0.6
0.8
0.6
0.4
The information in this statement that relates to the Mineral Resources or Ore Reserves listed in the table below is
based on work compiled by the person whose name appears in the same row. Each of these persons, other than Mr
de Klerk and Mr Johnson, is a full-time employee of Regis Resources Limited. Mr de Klerk is a full-time employee of
Cube Consulting Pty Ltd and Mr Johnson is a full-time employee of MPR Geological Consultants Pty Ltd. Each person
named in the table below are Members of The Australasian Institute of Mining and Metallurgy and/or The Australian
Institute of Geoscientists and have sufficient experience which is relevant to the style of mineralisation and types
of deposits under consideration and to the activity which they have undertaken to qualify as a Competent Person as
defined in the JORC Code 2012. It is noted that some of the Duketon satellite deposits were previously disclosed under
JORC Code 2004 requirements and have now been updated to JORC Code 2012 requirements. Each person named in
the table below consents to the inclusion in this report of the matters based on their information in the form and
context in which it appears.
REGIS RESOURCES // ASX ADDITIONAL INFORMATION (continued)
ACTIVITY
COMPETENT PERSON
IDENTIFIER INSTITUTE
Moolart Well Resource
Jarrad Price
Moolart Well Reserve
Quinton de Klerk
Garden Well Resource
Jarrad Price
Garden Well Reserve
Quinton de Klerk
Rosemont Resource
Jarrad Price
Rosemont Reserve
Quinton de Klerk
Tooheys Well Resource
Jarrad Price
Tooheys Well Reserve
Quinton de Klerk
Erlistoun Resource
Jarrad Price
Erlistoun Reserve
Quinton de Klerk
Dogbolter Resource
Jarrad Price
Dogbolter Reserve
Quinton de Klerk
Petra Resource
Jarrad Price
Petra Reserve
Quinton de Klerk
Anchor Resource
Jarrad Price
Anchor Reserve
Quinton de Klerk
King John Resource
Jarrad Price
Russells Find Resource
Jarrad Price
Baneygo Resource
Jarrad Price
Reichelts Find Resource
Jarrad Price
Gloster Resource
Jarrad Price
Coopers Resource
Jarrad Price
McPhillamys Resource
Jarrad Price
A
D
A
D
A
D
A
D
A
D
A
D
A
D
A
D
A
A
A
A
A
A
A
Australasian Institute of Mining and Metallurgy
111
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
Australasian Institute of Mining and Metallurgy
McPhillamys Reserve
Quinton de Klerk
D
Australasian Institute of Mining and Metallurgy
Forward Looking Statements
This report may contain forward looking statements that are subject to risk factors associated with gold exploration,
mining and production businesses. It is believed that the expectations reflected in these statements are reasonable
but they may be affected by a variety of variables and changes in underlying assumptions which could cause
actual results or trends to differ materially, including but not limited to price fluctuations, actual demand, currency
fluctuations, drilling and production results, Reserve estimations, loss of market, industry competition, environmental
risks, physical risks, legislative, fiscal and regulatory changes, economic and financial market conditions in various
countries and regions, political risks, project delay or advancement, approvals and cost estimates.
Forward-looking statements, including projections, forecasts and estimates, are provided as a general guide only and
should not be relied on as an indication or guarantee of future performance and involve known and unknown risks,
uncertainties and other factors, many of which are outside the control of Regis Resources Ltd. Past performance
is not necessarily a guide to future performance and no representation or warranty is made as to the likelihood of
achievement or reasonableness of any forward looking statements or other forecast.
REGIS RESOURCES // 2017 ANNUAL REPORT This page has been intentionally left blank.
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SUBIACO WA 6008
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