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2023 ReportPeers and competitors of Regis Resources:
Petropavlovsk PLCR E G I S R E S O U R C E S A N N U A L R E P O R T
CORPORATE
DIRECTORY
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 2
516 Hay 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
Front Cover Photo by Ben Broeder, Every Man & His Dog Media
Garden Well pit // Photo by Will Nguyen
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
ASX Additional Information
2
4
6
8
11
17
18
30
45
46
52
91
92
97
2
HIGHLIGHTS
Moolart Well Plant // Photo by Ben Broeder
CORPORATE
26%
25%
23%
11%
7%
NET PROFIT
AFTER TAX
EARNINGS
REVENUE
PER SHARE
REVENUE
REVENUE
EBITDA
DIVIDENDS
Net profit after tax up
26% to $174.2 million
for the financial year.
Earnings per share
up 25% to 34.60
cents per share.
Revenue up 11%
to $604.4 million.
EBITDA up 23%
to $312.5 million.
Dividends declared
for FY2018 up 7% to
16.0 cents per share.
CASH AND BULLION
Cash and Bullion increased to $208.8 million at 30 June 2018, up $57.1 million for the year.
2018
2017
$208.8 million
$151.7 million
MCPHILLAMYS PROJECT
McPhillamys Project advancing with DFS & EIS expected to be completed in December 2018 quarter.
REGIS RESOURCES // 2018 ANNUAL REPORT 3
DUKETON OPERATIONS
Record gold production at Duketon in FY2018 with 361,373 ounces of gold
produced at AISC of $901 per ounce.
Strong operating cashflow from Duketon of $300.8 million.
Strong operational performance at Duketon for FY2018 with full year of
production from satellite projects Gloster and Erlistoun.
Commencement of pre-strip mining at Anchor, Dogbolter and Tooheys Well
satellite pits.
FY2018 production guidance increased to 340,000-370,000 ounces of gold at
AISC $985-$1,055 per ounce.
EXPLORATION
Maiden Ore Reserve Estimate at the McPhillamys Gold Project is 60.1 million
tonnes at 1.05g/t Au for 2,034,000 ounces of gold.
Maiden Inferred Underground Mineral Resource Estimate at Rosemont of
1.4 million tonnes at 5.1g/t gold for 230,000 ounces of gold at a 2.0g/t gold
cut off grade.
RC and diamond drilling programmes at Garden Well Underground delivers
encouraging intercepts, and confirms the existence of high grade shoots 300m
south of the current pit design.
REGIS RESOURCES // 2018 ANNUAL REPORT 4
CHAIRMAN’S
REPORT
Dear Shareholder,
It is my great pleasure to present to you
the 2018 Regis Resources Annual Report.
As you are aware the Company announced that I will
be stepping down as Chairman and as a director at this
year’s Annual General Meeting. Over the last 9 years
I have had the privilege of leading this Company from
a pre-production exploration company to a highly
profitable leading mid-tier gold producer. I believe the
time is right for me to handover the leadership of Regis
as it embarks on the next phase of its growth.
I am handing over at a time when the Company is in a
very strong position having enjoyed a record breaking
year in FY2018 that included the following highlights:
Continued outstanding operational performance
at Duketon with record gold production of 361,373
ounces at all in sustaining costs of $901 per ounce.
Record profit after tax of $174.2 million, up 26% on
2017 with EBITDA up 23% to 312.5 million.
A fully franked final dividend of 8 cents per share
taking full year dividends to 16 cents per share.
The commencement of mining at the Tooheys Well,
Dogbolter and Anchor pits continuing the strategy of
blending higher grade satellite ore feed to existing
operations.
A maiden Ore Reserve of 60.1 million tonnes at
1.05g/t for 2.03 million ounces of gold estimated
at McPhillamys in NSW with a pre-feasibility study
demonstrating a robust large scale open pit gold
mine with a planned 7 million tonne per annum
mining and processing operation producing an
annual average of 192,000 ounces of gold over a nine
year mine life.
A successful underground drilling programme at
Rosemont that delivered a maiden underground
resource of 1.4 million tonnes at 5.10g/t Au for
230,000 ounces of gold ore.
Group Ore Reserves as at 31 March 2018 increased by
86% to 4.06 million ounces.
Ongoing work at McPhillamys during the year has
the project progressing through the regulatory
approvals process with the lodgement of the
Preliminary Environmental Assessment.
Once again the quality of the Duketon operation
delivered very strong financial results. Regis generated
a net operating cash flow of $259.7 million for FY2018
and at the end of the financial year had cash and bullion
holdings of $208.8 million with no bank debt. The full
year dividend of 16 cents per share in FY2018 represents
a payout ratio of 13% of revenue and 26% of EBITDA
for FY2018. Regis continues to be an Australian gold
industry leader on dividend payment metrics. Since
2013 Regis has paid a total of $326 million (65cps) in
fully franked dividends.
The Company’s record gold production was achieved
with a strong contribution from the higher grade
satellite projects of Gloster and Erlistoun. The strategy
of blending higher grade ore feed from satellite projects
will continue in FY2019 with the commencement of pre-
strip mining at the Tooheys Well, Dogbolter and Anchor
deposits. FY2019 is expected to be another year of
strong production with guidance of 340,000 - 370,000
ounces at an all in sustaining cost of $985 - $1,055 per
ounce.
It is an exciting time for Regis as the Company embarks
on its first underground mine at Rosemont. Subsequent
to the end of the year, the Regis board approved the
development of an underground mining operation
directly below the Rosemont open pit. Development
work commenced in the September 2018 quarter, with
the ordering of long lead items and an underground
mining contract tendering process. Commencement
of the portal development in the southern end of the
Rosemont Main Pit is expected by March 2019 with
processing beginning in the December 2019 quarter.
The focus on defining new underground resources will
now turn to Garden Well and the high grade shoots that
have been identified below the pit in the southern part
of the deposit.
During the year, work continued on progressing the
development of the McPhillamys project with a maiden
Reserve of 2.03 million ounces released in September
2017. Subsequent to the end of the year, the Company
submitted a Preliminary Environmental Assessment (PEA)
to the NSW Department of Planning and Environment
(DPE). The PEA is the trigger for the DPE to provide the
Secretary’s Environmental Assessments Requirements
REGIS RESOURCES // 2018 ANNUAL REPORT None of these achievements would be possible
without the relentless efforts and commitment
of all Regis employees and contractors and
I wish the Company every success in the future.
for the project, which allow the Environmental Impact
Statement (EIS) to be appropriately focussed to enable
regulatory assessment of the project. 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 EIS and the DFS.
and Pajingo gold mines. He has both the technical
and corporate experience to continue the disciplined
management of our current projects and to grow the
projects and Company as opportunities arise. I have
great confidence that under their stewardship Regis will
continue to prosper and grow.
I believe it is a very exciting time for Regis as we move
forward under the new leadership team to be led by
James Mactier as incoming Non-executive Chairman
and Jim Beyer as Managing Director.
James Mactier steps into the role of Chairman and
brings his personal values, business acumen and
strong relationships throughout the industry. He will
continue to maintain the Company culture that has
lead Regis to be the quality company it is today. Jim
is a high quality and proven mining executive. He was
most recently the CEO of Mount Gibson Iron Limited
and previously the General Manger of the Boddington
I would
Finally
like to take this opportunity to
acknowledge the hard work and dedication of the Regis
team. None of these achievements would be possible
without the relentless efforts and commitment of
all Regis employees and contractors and I wish the
Company every success in the future.
Yours sincerely
Mark Clark
Executive Chairman
6
CORPORATE
Revenue
Revenue
502
502
465
465
606
606
544
544
372
372
2014
2014
2015
2015
2016
2016
2017
2017
2018
2018
s
n
o
s
n
i
l
o
l
i
i
M
l
l
i
$
M
$
600
600
500
500
400
400
300
300
200
200
100
100
0
0
Driven by record production at the Duketon Gold
EBITDA
EBITDA
Project, Regis reported a 26% increase in profit after
tax for the 2018 financial year of $174.2 million.
234
234
%
%
(
e
(
u
e
n
u
e
n
v
e
This strong result was on the back of an 11% increase in gold revenue to $604.4 million driven by a 14% higher sales
e
v
R
e
volume. Accordingly, EBITDA increased by 23% from the previous period to $312.5 million for FY2018.
R
/
A
/
A
D
D
T
Regis sold a total of 362,790 ounces of gold during the year at an average price of A$1,676 per ounce. The Company
I
T
B
I
B
E
delivered the gold produced during the year into a combination of spot deferred contracts and at the prevailing spot
E
price. At the end of the financial year the Company had a total hedging position of 388,711 ounces of spot deferred
contracts with a delivery price of A$1,555 per ounce.
141
141
37.9% 38.9%
37.9% 38.9%
350
350
300
300
250
250
200
200
46.6% 46.6%
46.6% 46.6%
100
100
313
313
51.5%
51.5%
s
n
s
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253
253
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$
$
181
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100
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40
40
20
20
50
50
i
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i
0
0
0
0
)
)
2014
2014
2015
2015
2016
2016
2017
2017
2018
2018
The following graphs illustrate the strong performance of the Company across several profit metrics.
EBITDA
EBITDA
EBITDA Margin (%)
EBITDA Margin (%)
Revenue
Revenue
502
465
606
544
606
544
600
500
600
372
465
502
372
Net Profit After Tax
Net Profit After Tax
174
174
138
138
112
112
87
87
55
55
180
180
160
160
140
140
120
120
100
100
80
80
60
60
40
40
20
20
0
0
s
s
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$
$
2014
2015
2016
2017
2018
2014
2014
2015
2015
2016
2016
2017
2017
2018
2018
2014
2015
2016
EBITDA
2017
2018
EBITDA
234
100
313
253
313
100
80
181
253
234
46.6% 46.6%
80
51.5%
141
181
37.9% 38.9%
141
46.6% 46.6%
51.5%
100
50
37.9% 38.9%
Earnings & Dividend Per Share
Earnings & Dividend Per Share
)
%
(
e
u
n
e
v
e
R
/
A
D
T
I
B
E
35
35
30
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25
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0
2014
2014
34.6
34.6
27.6
27.6
15
15
16
16
22.4
22.4
13
13
17.4
17.4
6
6
2015
2015
2016
2016
2017
2017
2018
2018
)
60
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(
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A
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60
40
20
EBITDA
EBITDA Margin (%)
EPS
EPS
Dividend Per Share
Dividend Per Share
FY2014 NPAT, EBITDA & EPS adjusted to underlying result by excluding $202.7m after tax impairment charge
400
500
s
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300
400
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$
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300
350
250
300
250
200
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150
150
100
50
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180
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120
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100
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80
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60
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35
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C
C
2014
2015
2016
2017
2018
0
2014
2015
EBITDA
2016
EBITDA Margin (%)
2018
2017
Net Profit After Tax
Net Profit After Tax
174
174
138
138
112
112
87
87
55
55
2014
2014
2015
2015
2016
2016
2017
2018
2017
2018
Earnings & Dividend Per Share
Earnings & Dividend Per Share
34.6
34.6
27.6
27.6
22.4
22.4
17.4
17.4
15
15
16
16
13
13
11
11
0
0
6
6
2014
2014
2015
2015
2016
2016
2017
2017
2018
2018
EPS
EPS
Dividend Per Share
Dividend Per Share
REGIS RESOURCES // 2018 ANNUAL REPORT
Dividends Declared
20
15
Net cash from operating activities of $259.7 million was up 26% from the previous year. Robust operating cashflows
from the project generated an increase in the Company’s cash and bullion holdings to $208.8 million, up $57.1 million
10
from the previous year after payment of $80.7 million in dividends and $33 million in exploration expenditure.
8
8
7
9
The Company paid a total of $80.7 million in fully franked dividends during the year and subsequent to the end of
5
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 FY2018. The full year
dividend of 8 cents per share coupled with the 8 cents per share interim dividend paid in March 2018, took the full
0
year pay out to 16 cents per share. This represents a 13.4% payout of FY2018 revenue and 46% of net profit after tax.
Since the commencement of dividend payments in 2013, the Company has paid a total of $326 million in fully franked
dividends (65ps).
2016
Interim
Final
2018
2015
2017
8
4
6
7
e
r
a
h
S
r
e
P
s
t
n
e
C
Dividends Declared
Cumulative Dividends Paid
20
15
10
5
0
e
r
a
h
S
r
e
P
s
t
n
e
C
8
7
8
8
9
4
2016
Interim
2017
2018
Final
6
2015
350
300
250
200
150
100
50
0
s
n
o
i
l
l
i
M
$
326
245
170
75
75
105
2013
2014
2015
2016
2017
2018
The following chart details the movement in the Company’s cash reserves over the financial year:
Cumulative Dividends Paid
Cash & Gold on Hand - FY 2018
326
$300.8
245
170
75
75
105
($80.7)
($46.0)
($32.8)
2013
2014
2015
2016
2017
2018
($39.1)
$151.7
($36.9)
($8.2)
$208.8
s
n
o
i
l
l
i
M
$
s
n
o
i
l
l
i
M
$
350
300
250
450
200
400
150
350
100
50
300
0
250
200
150
100
50
Ju ne 2017
O perations
Dividen ds
D evelop m ent
Mine
Exploration
Other Capex
Inco m e Tax
Other
Ju ne 2018
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 // 2018 ANNUAL REPORT
8
DUKETON
GOLD PROJECT
The Duketon Gold Project is located in the
North Eastern Goldfields of Western Australia
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, Anchor Gold Mine and
the Dogbolter Gold Mine; and the Duketon South Operations (“DSO”) comprising the Garden Well and Rosemont Gold
Mines and surrounding satellite deposits including the Erlistoun Gold Mine and Tooheys Well Gold Mine. The Duketon
Project has in excess of 1,000 square kilometres of exploration and mining tenure.
Dogbolter Gold Mine; and the Duketon South Operations (“DSO”) comprising the Garden Well
and Rosemont Gold Mines and surrounding satellite deposits including the Erlistoun Gold Mine
and Tooheys Well Gold Mine. The Duketon Project has in excess of 1,000 square kilometres of
exploration and mining tenure.
The Duketon Project produced record gold production for 2018, with 361,373 ounces of gold
produced which was at the upper end of FY2018 guidance of 335,000-365,000 ounces. The
project benefited from a full year of production of higher grade ore feed from the Gloster and
4
REGIS RESOURCES // 2018 ANNUAL REPORT
The Duketon Project produced record gold production for 2018, with 361,373 ounces of gold produced which was at
the upper end of FY2018 guidance of 335,000-365,000 ounces. The project benefited from a full year of production
of higher grade ore feed from the Gloster and Erlistoun satellite deposits. Milled grade across the Duketon Project
increased by 7% to 1.19g/t and validated the strategy of pursuing organic growth through aggressive regional
exploration programmes across Duketon. All in sustaining costs were $901 per ounce which were towards the lower
end of FY2018 cost guidance and reflected the excellent cost control at the operations.
9
Operating results for the entire Duketon Project are summarised below:
Ore mined
Waste mined
Stripping ratio
Ore mined
Ore milled
Head grade
Recovery
Gold production
Cash cost
Cash cost inc royalty
All in Sustaining Cost
Mbcm
Mbcm
w:o
Mt
Mt
g/t
%
koz’s
A$/oz
A$/oz
A$/oz
2018
4.58
20.13
4.40
10.55
10.04
1.19
94
361
721
794
901
2017
4.56
25.55
5.60
10.85
9.78
1.11
93
324
790
864
945
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 2018 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
2018
1.72
5.07
2.9
3.15
3.26
1.09
94
107
649
718
827
2017
1.74
7.77
4.5
3.37
2.95
1.14
94
101
621
697
785
Annual production for FY2018 at DNO was 106,928 ounces at a cash cost of $649 per ounce and an all in sustaining cost
of $827 per ounce. Production at DNO increased by 6% from the previous year due to a full year of mining operations
at the Gloster satellite deposit. Gloster ore is hauled approximately 26 kilometres by road train to the processing
facility at Moolart Well where it is blended with ore from that operation. The ore from Gloster milled during 2018 was
of a higher grade and softer, oxide material than the ore available from Moolart Well. As a result, the mill throughput
increased by 10% from the prior year.
REGIS RESOURCES // 2018 ANNUAL REPORT
DUKETON SOUTH OPERATIONS
10
The Duketon South Operations (“DSO”) includes the Garden Well, Rosemont, Erlistoun, Tooheys Well, Baneygo and
other satellite projects in proximity to the Garden Well processing plant.
Operating results for the year to 30 June 2018 were as follows:
Ore mined
Waste mined
Stripping ratio
Ore mined
Ore milled
Head grade
Recovery
Gold production
Cash cost
Cash cost inc royalty
All in Sustaining Cost
Mbcm
Mbcm
w:o
Mt
Mt
g/t
%
koz’s
A$/oz
A$/oz
A$/oz
2018
2.86
15.06
5.3
7.40
6.79
1.24
94
254
751
826
932
2017
2.82
17.78
6.3
7.48
6.83
1.10
93
223
867
940
1,017
DSO produced 254,445 ounces of gold for the year, which was an increase of 14% on the prior year. Gold production
increased due to a full 12 months of mining a higher grade and softer ore from the Erlistoun satellite deposit. Head
grade was 1.24g/t, an increase of 13% from the prior year.
Pre-production mining at the Tooheys Well satellite project commenced in January 2018 with first ore to be carted in
October 2018 to the Garden Well processing plant, located approximately 2.5 kilometres away.
FY2019 GUIDANCE
Regis is expecting another strong year of cashflow and has forecasted that guidance will be consistent with the
2018 financial year. All-in sustaining costs will be higher than the prior year due to $40 million of growth capital for
Tooheys Well and other satellite operations. Gold production and operating costs for FY2019 are expected to be in
the following ranges:
Gold production:
340,000 – 370,000 ounces
Cash costs, including royalties: $880 – $950 per ounce
All in Sustaining Cost:
$985 – $1,055 per ounce
REGIS RESOURCES // 2018 ANNUAL REPORT
GOLD
EXPLORATION
11
Regis controls a significant tenement package,
encompassing 200 granted exploration,
prospecting and mining licences
Duketon Gold Project
Regis controls a significant tenement package, encompassing 200 granted exploration, prospecting and mining
licences covering 1,674 square kilometres and 42 miscellaneous licences 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.
Significant exploration projects advanced during the year ended 30 June 2018 are outlined below.
Rosemont Underground
The Rosemont Project is a fully operational open pit gold mine (commenced in March 2013) with a stand-alone
crushing and grinding plant, piping an ore slurry to the Garden Well CIL processing facility. The current open pit mine
is expected to continue until at least FY2024.
The geology at Rosemont has gold hosted in a steeply dipping quartz-dolerite unit intruding into a mafic-ultramafic
sequence. Gold mineralisation is within a brittle quartz-dolerite phase of the Rosemont Dolerite, primarily occurring
within discrete, steeply dipping, quartz-dolerite paralled, en-echelon and stacked vein structures. The quartz-
dolerite varies from 5 metres, up to 100 metres wide.
RC and diamond drilling programmes were undertaken during the year aimed at increasing data-density and
geological understanding in the two zones of this study. The drilling has helped to further define high grade gold
mineralisation in two distinct zones beneath the life of mine open pit designs to a sufficient level to support an
underground mining operation.
Subsequent to the end of the year, the Company announced the approved development of an underground mining
operation directly below the current Rosemont open pit as and part of an expansion of the existing operations.
The combined open pit and underground mine is scheduled to deliver 10.3 million tonnes of ore at 1.72g/t for 570,000
ounces over a current five year mine life.
The development timeline will be as follows:
Commencement of Development work, including long lead items and underground mining contract tendering
process – September 2018 quarter
Commencement of portal work – March 2019 quarter
Processing of first material – December 2019 quarter
REGIS RESOURCES // 2018 ANNUAL REPORT 12
Oblique Long Section looking northwest shows final pit design and proposed UG mine design and stoping blocks.
Oblique Long Section looking northwest shows final pit design and proposed UG mine design and stoping blocks.
Oblique Long Section looking northwest shows final pit design and proposed UG mine design and stoping blocks.
Garden Well Underground
Section 78015mN showing high grade gold intercepts at Rosemont south, 200m below proposed UG development stope design. Cross Section
78400mN at Rosemont Central zone along strike and outside of current UG resource domains.
Section 78015mN showing high grade gold intercepts at Rosemont south, 200m below proposed UG
development stope design. Cross Section 78400mN at Rosemont Central zone along strike and outside of
current UG resource domains.
Section 78015mN showing high grade gold intercepts at Rosemont south, 200m below proposed UG
development stope design. Cross Section 78400mN at Rosemont Central zone along strike and outside of
current UG resource domains.
RC and diamond drilling programmes were undertaken during the year to test the continuity of high grade gold
mineralisation located below the southern end of the final Garden Well pit design and to reduce drill spacing from
40m x 40m to 40m x 20m.
Drilling results show significant widths and grades of gold mineralisation and indicate the potential for a robust
underground target below the southern end of the open pit. The southern high grade shoot measures 4-10m true
width across strike and 200m north-south along strike. The zone of mineralisation is located between 100-350m
8
below surface, dips to the east and is open to the south. Drilling along strike has also identified several high grade
shoots beneath the pit and further to the south.
8
A new high grade shoot has been identified 300m south of the current pit design, 200m below surface and is
open down plunge. Drilling will continue to define the extent of the southern high grade shoots along strike and
down plunge.
The long section and cross section below include the location of the intercepts referred to above.
REGIS RESOURCES // 2018 ANNUAL REPORT
Garden Well Underground
RC and diamond drilling programmes were undertaken during the year to test the continuity of
high grade gold mineralisation located below the southern end of the final Garden Well pit design
and to reduce drill spacing from 40m x 40m to 40m x 20m.
Drilling results show significant widths and grades of gold mineralisation and indicate the potential
for a robust underground target below the southern end of the open pit. The southern high grade
shoot measures 4-10m true width across strike and 200m north-south along strike. The zone of
mineralisation is located between 100-350m below surface, dips to the east and is open to the
south. Drilling along strike has also identified several high grade shoots beneath the pit and further
to the south.
A new high grade shoot has been identified 300m south of the current pit design, 200m below
surface and is open down plunge. Drilling will continue to define the extent of the southern high
grade shoots along strike and down plunge.
The long section and cross section below include the location of the intercepts referred to above.
Garden Well Long Section showing high grade shoots beneath the final pit design and highlights results.
Garden Well Long Section showing high grade shoots beneath the final pit design and highlights
results reported this quarter.
13
9
Group Reserve Growth
An aggressive exploration programme at the Duketon project continues to be focussed 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 Group resource
and reserve base when it released the annual resources and reserves update in July 2018. Group
Ore Reserves increased by 86% from 2.18 million ounces to 4.06 million ounces, after accounting
for mining depletion of 396,000 ounces.
The change in the Group Ore Reserve from March 2017 to March 2018 is as follows:
10
REGIS RESOURCES // 2018 ANNUAL REPORT
Group Reserve Growth
14
An aggressive exploration programme at the Duketon project continues to be focussed 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 Group resource and reserve base when it released the annual resources and
reserves update in July 2018. Group Ore Reserves increased by 86% from 2.18 million ounces to 4.06 million ounces,
after accounting for mining depletion of 396,000 ounces.
The change in the Group Ore Reserve from March 2017 to March 2018 is as follows:
31 March 2017
Depleted by Mining to 31 March 2018
31 March 2017 Net of Depletion
31 March 2018
% Variation net of Depletion
TOTAL ORE RESERVE
TONNES
(MT)
GOLD GRADE
(G/T)
GOLD METAL
(KOZ)
59.3
-10.5
48.8
117.2
115%
1.14
1.17
1.14
1.08
2,182
-396
1,786
4,065
104%
The major contributors to the increase in Ore Reserves net of depletion were:
Maiden Ore Reserve of 2,034,000 ounces at the McPhillamys Gold Project;
A review of current pit design parameters including costs, metallurgical and geotechnical performance of mining
projects to date;
McPhillamys Gold Project
A review of the open pit optimisation shell selection strategy to individually suit each deposit; and
The inclusion of further drilling results.
The McPhillamys Gold Project is wholly owned by Regis and is located approximately 250
kilometres west of Sydney in the Central West region of New South Wales. In September 2017,
McPhillamys Gold Project
the Company announced a maiden Ore Reserve Estimate of 60.1 million tonnes at 1.05g/t Au for
The McPhillamys Gold Project is wholly owned by Regis and is located approximately 250 kilometres west of Sydney
in the Central West region of New South Wales. In September 2017, the Company announced a maiden Ore Reserve
2,034,000 ounces of gold.
Estimate of 60.1 million tonnes at 1.05g/t Au for 2,034,000 ounces of gold.
Pre-feasibility level studies show the McPhillamys Gold Project is a robust, large scale open pit
gold mine with a planned 7 million tonne per annum mining and processing operation producing
an average of 192,000 ounces per annum over a nine year mine life.
Key life of mine physical results from the study are summarised below:
12
REGIS RESOURCES // 2018 ANNUAL REPORT
Pre-feasibility level studies show the McPhillamys Gold Project is a robust, large scale open pit gold mine with a
planned 7 million tonne per annum mining and processing operation producing an average of 192,000 ounces per
annum over a nine year mine life.
15
Key life of mine physical results from the study are summarised below:
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)
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
91.6
21.3
112.9
4.29
841
95.0%
60.1
1.05
85.0%
1,728,264
9
u
A
t
/
g
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
9
Ounces
Recovered
Milled
Grade (g/t)
142,688
181,016
179,298
192,720
177,647
209,062
210,877
224,493
210,461
0.90
0.95
0.94
1.01
0.93
1.09
1.10
1.17
1.46
Subsequent to the end of the year, the Company announced that a Preliminary Environmental Assessment (PEA) has
been submitted to the NSW Department of Planning and Environment (DPE). The PEA represents the lead document in
the development application phase and is the trigger for the DPE to provide the Secretary’s Environmental Assessments
Requirements for the project, which will allow for the Environmental Impact Statement to be appropriately focussed
to enable regulatory assessment of the project.
Contemporaneous with the preparation of the Environmental Impact Statement, the Company expects to complete
the Definitive Feasibility Study by December 2018.
REGIS RESOURCES // 2018 ANNUAL REPORT
Discovery Ridge
Discovery Ridge is located approximately 32 kilometres south west of the McPhillamys gold
project in NSW. It is a shear hosted gold deposit in strongly foliated, fine-grained
metasediments of the Ordovician Coombing and Adaminaby Formations. The deposit is within
the hinge zone of a tight, steep north plunging D2 fold on the contact of the Adaminaby Group
with the Coombing Formation.
The deposit has a known strike length in the order of 200 metres and comprises a well-defined
steeply north pitching Eastern Lode with widths of around 50 metres and known depths of up to
Discovery Ridge
500 metres and a parallel but more diffuse West Lode of similar orientation.
16
Discovery Ridge is located approximately 32 kilometres south west of the McPhillamys gold project in NSW. It is
a shear hosted gold deposit in strongly foliated, fine-grained metasediments of the Ordovician Coombing and
Adaminaby Formations. The deposit is within the hinge zone of a tight, steep north plunging D2 fold on the contact
of the Adaminaby Group with the Coombing Formation.
The deposit has a known strike length in the order of 200 metres and comprises a well-defined steeply north pitching
Eastern Lode with widths of around 50 metres and known depths of up to 500 metres and a parallel but more diffuse
West Lode of similar orientation.
A total of 5,167 metres of resource and diamond drilling were undertaken during the year which
have confirmed location and tenor of historical gold intercepts. Infill resource and diamond
drilling continues with a Mineral Resource estimation and update and a maiden Ore Reserve is
expected to be announced later in the year along with a pre-feasibility study.
A total of 5,167 metres of resource and diamond drilling were undertaken during the year which have confirmed
location and tenor of historical gold intercepts. Infill resource and diamond drilling continues with a Mineral Resource
estimation and update and a maiden Ore Reserve is expected to be announced later in the year along with a pre-
feasibility study.
Discovery Ridge cross section 22,385mN (local grid)
Discovery Ridge cross section 22,385mN (local grid)
14
REGIS RESOURCES // 2018 ANNUAL REPORT
GROUP ORE RESERVES As at 31 March 2018
PROVED
PROBABLE
TOTAL ORE RESERVE
17
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
PERSON3
Duketon Main Deposits
Sub Total
PROJECT
Moolart Well1
Garden Well1
Rosemont1
Tooheys Well5
Gloster 1
Erlistoun1
Baneygo
Petra
Dogbolter
Anchor
Duketon Satellite
Deposits
McPhillamys4
Open-Pit
Open-Pit
Open-Pit
Open-Pit
Open-Pit
Open-Pit
Open-Pit
Open-Pit
Open-Pit
Open-Pit
> 0.4
> 0.4
> 0.4
> 0.5
> 0.4
> 0.5
> 0.5
> 0.4
> 0.4
> 0.4
1.3
5.6
2.0
8.9
0.0
1.0
0.1
-
-
-
-
0.91
0.71
1.24
38
128
80
1.4
0.79
15.8
0.94
6.5
1.32
0.86
246
23.7
1.03
-
0.88
1.10
-
-
-
-
0
28
3
-
-
-
-
7.1
6.3
3.4
4.0
0.9
1.6
0.1
1.61
0.93
1.39
1.22
1.11
1.18
1.87
36
474
276
787
366
190
154
158
31
61
7
2.7
0.85
21.4
0.88
8.5
1.31
74
603
356
32.6
0.99
1,033
7.1
7.3
3.5
4.0
0.9
1.6
0.1
1.61
366
0.93
1.39
1.22
1.11
1.18
1.87
217
157
158
31
61
7
Sub Total
1.1
0.90
31
23.4
1.28
966
24.5
1.27
998
Open-Pit
> 0.4
-
-
-
60.1
1.05
2,034
60.1
1.05
2,034
Regis
Grand Total
10.0
0.86
278
107.2
1.10
3,787
117.2
1.08
4,065
GROUP MINERAL RESOURCES As at 31 March 2018
GOLD
PROJECT
MEASURED
INDICATED
INFERRED
TOTAL RESOURCE
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
PERSON2
TYPE
Moolart Well1
Open-Pit
0.4
5.1
0.82
Garden Well1
Open-Pit
0.4
Rosemont1
Open-Pit
0.4
Rosemont 5
Underground
2.0
6.5
2.5
-
0.71
1.20
-
135
147
95
-
17.1
0.69
377
11.6
0.70
261
33.8
0.71
773
51.6
0.83
1,377
10.8
0.76
264
68.9
0.81
1,787
14.9
1.17
562
-
-
-
0.8
1.4
1.36 36.58
18.3
1.20
5.10
230
1.4
5.10
694
230
Duketon Main
Deposits
Sub Total
14.1
0.83
378
83.6
0.86 2,315
24.6
1.00
792
122.4
0.89 3,485
Tooheys Well3
Open-Pit
0.4
0.0
0.86
Gloster 1
Baneygo
Open-Pit
0.4
1.0
0.88
Open-Pit
0.4
-
-
Erlistoun1
Open-Pit
0.4
0.1
1.10
Dogbolter
Open-Pit
0.4
Russells Find
Open-Pit
0.4
Petra
Open-Pit
0.4
King John
Open-Pit
0.4
Reichelts Find
Open-Pit
0.4
Open-Pit
0.4
-
-
-
-
-
-
-
-
-
-
-
-
0
28
15.8
1.18
11.7
0.79
-
3
-
-
-
-
-
-
9.2
5.3
4.0
2.2
1.3
-
0.6
0.2
0.96
1.27
1.04
1.06
1.07
-
2.18
1.75
601
297
283
215
141
75
44
-
43
9
1.1
0.89
31
17.0
1.16
5.8
0.66
123
18.4
0.75
633
447
1.9
0.95
0.6
0.99
0.1
0.3
0.8
0.8
0.3
1.39
0.98
0.67
1.56
2.26
0.1
0.95
57
19
5
11
18
42
21
2
11.1
0.96
340
5.9
4.1
2.5
2.1
0.8
0.9
0.2
1.24
1.10
1.05
0.91
1.56
2.21
1.53
237
146
86
62
42
64
11
Anchor
Duketon
Satellite
Deposits
Duketon
Sub Total
1.1
0.90
31
50.2
1.06 1,707
11.8
0.87
329
63.2
1.02 2,067
Total
15.2
0.84
409
133.8
0.93 4,022
36.5
0.96
1,121
185.5
0.93
5,552
McPhillamys4
Total
0.4
-
-
-
67.7
1.05
2,282
1.2
0.64 25.46
68.9
1.04
2,307
A
Regis
Grand Total
15.2
0.84
409
201.6
0.97 6,304
37.7
0.95 1,146
254.5
0.96 7,859
C
C
C
C
C
C
C
C
C
C
C
A
A
A
B
A
A
A
A
A
A
A
A
A
A
REGIS RESOURCES // 2018 ANNUAL REPORT
Gloster Pit // Photo by Richard Spilsbury
Directors'
Report
DIRECTORS'
REPORT
Your directors submit their report for
the year ended 30 June 2018.
19
DIRECTORS
The directors of the Company in office since 1 July 2017 and up to the date of this report are:
Mr Mark Clark B.Bus CA
Executive Chairman
Mr Clark has over 27 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, was a director from April 2003 and was Managing Director from December 2005 until
Equigold’s merger with Lihir Gold Limited in June 2008.
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.
Mr Mark Okeby LLM
Deputy Chairman/Lead Independent Non-Executive Director
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.
REGIS RESOURCES // 2018 ANNUAL REPORT Mr Ross Kestel B.Bus, CA, MAICD
Independent Non-Executive Director
20
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(Hons), 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.
Mrs Fiona Morgan CPEng, BE(Hons), FIEAust, FAusIMM, GAICD
Independent Non-Executive Director
Mrs Morgan is a Chartered Professional Engineer with over 24 years’ experience in the mining industry, including
working on gold, nickel, coal and iron ore projects. Mrs 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.
Mrs Morgan is a Fellow of the Institution of Engineers Australian, a Fellow of the Australasian Institute of Mining
and Metallurgy and a graduate member of the Australian Institute of Company Directors.
During the past three years, Mrs Morgan has not served as a director of any other ASX listed company.
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.
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
40,389
The financial effect of these dividends has not been brought to account in the consolidated financial statements for
the year ended 30 June 2018 and will be recognised in subsequent financial reports.
REGIS RESOURCES // DIRECTORS' REPORT (continued) 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:
21
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.
OPERATING AND FINANCIAL REVIEW
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, the Gloster Gold Mine, Anchor Gold Mine and
the Dogbolter Gold Mine. The Duketon South Operations (DSO) contains the Garden Well Gold Mine, the Rosemont
Gold Mine, the Erlistoun Gold Mine and the Tooheys Well 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.
REGIS RESOURCES // 2018 ANNUAL REPORT Financial Summary
22
KEY FINANCIAL DATA
Financial results
Sales revenue
Cost of sales (excluding D&A)(i)
Other income
Corporate, admin and other costs
EBITDA(i)
2018
$’000
2017
$’000
CHANGE
$’000
CHANGE
%
604,425
542,218
(279,273)
(278,374)
3,396
4,962
(15,987)
(15,504)
312,561
253,302
62,207
(899)
(1,566)
(483)
59,259
(6,856)
52,784
(16,716)
36,068
53,645
63,195
98,441
7.01
11.5%
0.3%
(31.6%)
3.1%
23.4%
11.9%
26.9%
28.8%
26.1%
26.0%
54.0%
18.3%
25.4%
Depreciation and amortisation (D&A)
(64,437)
(57,581)
Profit before tax(i)
Income tax expense
Reported profit after tax
Other financial information
Cash flow from operating activities
Net cash
Net assets
248,921
(74,690)
174,231
196,137
(57,974)
138,163
259,727
206,082
180,276
117,081
636,842
538,392
Basic earnings per share (cents per share)
34.60
27.59
(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 record after tax profit of $174.2 million for the full year to 30 June 2018, which was up 26.1% from
the previous corresponding year result of $138.2 million. Record gold production of 361,373 ounces for the year and
the Company’s commitment to maximising operational efficiencies and controlling costs are the key drivers in the
current year result.
Sales
The Company produced 361,373 ounces of gold for the year ended 30 June 2018. Gold sales revenue rose by 11.5%
from the previous year with 359,750 ounces of gold sold at an average price of $1,680 per ounce in 2018 (2017: 322,355
ounces at $1,682 per ounce). The Company delivered gold produced into a combination of forward contracts and at
the prevailing spot price. The total hedging position at the end of the year was 388,711 ounces of forward contracts
with an average delivery price of $1,555 per ounce (2017: 396,406 ounces of forward contracts with a weighted average
forward price of $1,551 per ounce).
Cost of Sales
Costs of sales including royalties, but before depreciation and amortisation increased marginally by 0.3% to
$279.3 million.
Depreciation and Amortisation
Depreciation and amortisation charges increased by 11.9% from the prior year as the Company’s assets mature and
depreciation and amortisation rates based on the units of production method increase as reserves are depleted.
Cash Flow from Operating Activities
Cash flow from operating activities was $259.7 million, up 26% on the prior year due to increased production. During
the year, the Company paid $36.9 million of income taxes.
The Company continued to provide strong returns to shareholders through the payment of two fully franked dividends
in 2018 totalling $80.7 million.
REGIS RESOURCES // DIRECTORS' REPORT (continued) Duketon North Operations (“DNO”)
Operating results for the 12 months to 30 June 2018 were as follows:
23
Ore mined
Waste mined
Strip ratio
Ore mined
Ore milled
Head grade
Recovery
Gold production
Cash cost per ounce – pre royalties
Cash cost per ounce – incl. royalties
All-in Sustaining Cost (“AISC”)
30 JUNE 2018
30 JUNE 2017
BCM
BCM
w:o
1,721,414
1,742,903
5,074,235
7,768,536
2.9
4.5
Tonnes
3,154,597
3,368,392
Tonnes
3,255,901
2,950,400
g/t
%
1.09
94
1.14
94
Ounces
106,928
100,875
A$/oz
A$/oz
A$/oz
$649
$718
$827
$621
$697
$785
DNO produced 106,928 ounces of gold for the year at an all-in sustaining cost of $827 per ounce. Gold production
was up 6% on the prior year as a result of increased throughput at the Moolart Well processing facility and higher
grade ore from a full year of production from the Gloster satellite pit. Throughput was up 10% from last year due to
processing softer ore from the Gloster deposit.
In May 2018, mining commenced at the Anchor and Dogbolter satellite pits, with first ore expected to be trucked and
hauled to the Moolart Well plant in mid 2019.
Duketon South Operations (“DSO”)
Operating results at the Duketon South Operations for the 12 months to 30 June 2018 were as follows:
Ore mined
Waste mined
Strip ratio
Ore mined
Ore milled
Head grade
Recovery
Gold production
Cash cost per ounce – pre royalties
Cash cost per ounce – incl. royalties
All-in Sustaining Cost (“AISC”)
30 JUNE 2018
30 JUNE 2017
2,857,329
2,817,291
15,060,386
17,783,273
5.3
6.3
BCM
BCM
w:o
Tonnes
7,400,488
7,481,128
Tonnes
6,783,488
6,830,460
g/t
%
1.24
94
1.10
93
Ounces
254,445
223,478
A$/oz
A$/oz
A$/oz
$751
$826
$932
$867
$940
$1,017
Production at DSO increased by 14% from the previous year with 254,445 ounces of gold produced at an all-in
sustaining cost of $932 per ounce which was 8% lower than last year. Production is higher due to a full 12 months of
mining of higher grade and softer ore from the Erlistoun gold deposit which contributed to a higher grade ore feed.
Pre-Strip mining commenced at the Tooheys Well satellite pit in January 2018, with first gold production expected to
be in the December 2018 quarter.
REGIS RESOURCES // 2018 ANNUAL REPORT Exploration
24
During the year, a total of 253,077 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:
PROSPECT
AIRCORE
RC
DIAMOND
TOTAL
PROSPECT
AIRCORE
RC
DIAMOND
TOTAL
Rosemont
-
40,408
9,486
49,894
Moolart Well
2,461
22,622
Baneygo
4,833
13,790
Garden Well
Beamish
McPhillamys
-
-
-
18,306
16,834
-
-
25,083
18,623
174
18,480
-
16,834
6,865
5,366
12,231
King John
4,266
7,646
Petra
7,372
-
Coopers
3,996
3,141
Salt Soak
5,730
1,063
Ranch
6,585
-
Reichelts
-
6,413
Steer Creek
5,406
-
Pleco
1,530
3,679
Ventnor
5,029
-
Russells Find
-
4,863
Paddy Well
4,448
-
Anchor
2,067
2,348
McKenzie Well
3,337
756
-
-
-
-
-
-
-
-
-
-
-
-
-
11,912
7,372
7,137
6,793
6,585
6,413
5,406
5,209
5,029
4,863
4,448
4,415
Discovery
Ridge
-
3,912
1,255
5,167
Tooheys Well
1,301
1,638
284
3,223
Erlistoun
-
2,876
Little Well
2,296
-
Dogbolter
792
1,923
Idaho
-
2,585
Ten Mile Bore
Bella Well
1,998
1,996
Cuthbert Bore
1,639
Speights
Rojo
Deep Well
Camel Hump
Mt Varden
Slate Well
Butchers Well
1,568
1,360
1,051
981
821
636
592
-
-
-
-
-
-
-
-
-
-
Gloster
-
450
Cork Tree Well
302
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,876
2,296
2,715
2,585
1,998
1,996
1,639
1,568
1,360
1,051
981
821
636
592
450
302
4,093
Total
74,393 162,118
16,566 253,077
Significant projects advanced during the year ended 30 June 2018 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.
Rosemont Underground
The Rosemont Project commenced in March 2013 and is a fully operational open pit gold mine with a stand-alone
crushing and grinding plant, piping an ore slurry to the Garden Well CIL. The geology at Rosemont has gold hosted in
a steeply dipping quartz-dolerite unit intruding into a mafic-ultramafic sequence. Gold mineralisation is associated
with quartz-albite-carbonate-chlorite-sulphide alteration of the quartz dolerite unit which varies from 5 metres to
greater than 100 metres wide.
In March 2018, the Company announced a maiden Inferred Underground Mineral Resource Estimate (MRE) for the
Rosemont Underground project of 1.4 million tonnes at 5.10g/t Au for 230,000 ounces of gold.
Drilling completed at Rosemont during the year included RC drilling and diamond drilling programmes to further define
high grade gold mineralisation and increase data-density and geological understanding. Both drill programmes were
successful in defining high grade gold mineralisation in two distinct zones beneath the life of mine open pit designs
to support an underground MRE.
Further drilling is continuing with a focus on defining new high grade shoots in the central zone with RC drilling and
extending the existing resources at depth below the current underground (U/G) domains with deeper diamond drilling.
Subsequent to the end of the year, the Regis board approved the development of an U/G mining operation directly
below the Rosemont open pit. Development work will commence in the September 2018 quarter, with the ordering of
long lead items and an underground mining contract tendering process. Commencement of the portal development
in the southern end of the Rosemont Main Pit is expected by March 2019 with processing beginning in the December
2019 quarter.
REGIS RESOURCES // DIRECTORS' REPORT (continued) Garden Well Underground
A review of the historic drilling below the final pit design at Garden Well indicated the potential for a significant
underground target below the southern end of the open pit project. During the year, RC and diamond drilling
programmes were conducted to test the continuity of high grade gold mineralisation and to reduce drill spacing
from 40m x 40m to 40m x 20m. Drilling results have shown significant widths and grades of gold mineralisation
and has identified several high grade shoots beneath the pit and further to the south. The southern high grade
shoot measures 4-10m width across strike and 200m north-south along strike. The zone of mineralisation is located
between 100-350m below surface and dips to the east and is open to the south. Drilling will continue to define the
extent of the southern high grade shoots along strike and down plunge.
25
Baneygo-Idaho Project
The Baneygo-Idaho Gold Project is located 15 kilometres south along strike of the Rosemont Gold Deposit and has a
resource of 11 million tonnes at 0.96g/t AU for 340,380 ounces. Gold mineralisation extends over a 2.5 kilometre strike
and is hosted in quartz dolerite which has intruded a sequence of mafic-ultramafic-sedimentary units.
A RC infill programme was undertaken during the year with the purpose being to convert inferred resources that may
exist inside or below the current pit designs and to ensure drill coverage in gaps in the existing 2.5 kilometre strike
with a view to adding further resources. Drilling to date has allowed the estimation of an Ore Reserve of 4 million
tonnes at 1.22g/t Au for 158,000 ounces across four shallow oxide pits.
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. In September 2017, Regis announced a maiden Ore Reserve of 60.1 million tonnes at 1.05g/t Au for 2.03 million
ounces.
Pre-feasibility level studies show that the McPhillamys Gold Project is a robust, large scale open pit gold mine with
a planned 7 million tonne per annum mining and processing operation producing an average of 192,000 ounces per
annum over a ten year mine life.
Subsequent to the end of the year, the Company announced that a Preliminary Environmental Assessment (PEA) has
been submitted to the NSW Department of Planning and Environment (DPE). The PEA represents the lead document in
the development application phase and is the trigger for the DPE to provide the Secretary’s Environmental Assessments
Requirements for the project, which will allow for the Environmental Impact Statement to be appropriately focussed
to enable regulatory assessment of the project.
Contemporaneous with the preparation of the Environmental Impact Statement, the Company expects to complete
the Definitive Feasibility Study by December 2018.
Discovery Ridge Gold Deposit
Approximately 32 kilometres from the McPhillamys Gold Project is the 100% owned Discovery Ridge deposit, a shear
hosted gold deposit located in strongly foliated, fine grained metasediments of the Ordovician Coombing and
Adaminaby Formations.
The deposit is located within the hinge zone of a tight, steep north plunging D2 fold on the contact of the Adaminaby
Group with the Coombing Formation. The deposit has a known strike length in the order of 200 metres and comprises
a well-defined steeply north pitching East Lode with widths of around 50 metres and known depths of up to 500
metres and a parallel but more diffuse West Lode of similar orientation.
A total of 5,167 metres of resource and diamond drilling was undertaken during the year which has confirmed the
location and tenor of historical gold intercepts which will be included in an updated resource and maiden reserve
estimation. Further drilling is planned to test the northern down plunge extension of the eastern following up on a
strong intersection.
Infill resource and diamond drilling continues with a Mineral Resource estimation and update and a maiden Ore
Reserve is expected to be announced later in the year along with a pre-feasibility study.
REGIS RESOURCES // 2018 ANNUAL REPORT 26
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
Share issue
Subsequent to year end, 425,133 shares have been issued as a result of the exercise of employee options for proceeds
of $35,000.
Dividends
On 27 August 2018, the directors proposed a final dividend on ordinary shares in respect of the 2018 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.
REGIS RESOURCES // DIRECTORS' REPORT (continued) 27
Ore trucked from Gloster // Photo by Ben Broeder
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.
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.
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.
REGIS RESOURCES // 2018 ANNUAL REPORT SHARE OPTIONS
28
Unissued Shares
At the date of this report, the Company had the following unissued shares under listed and unlisted options.
MATURITY DATE
Unlisted options
11 August 2019
13 May 2020
1 July 2021
Total
EXERCISE PRICE
NUMBER
OUTSTANDING
$1.40
$2.70
$3.90
3,425,000
100,000
1,690,000
5,560,000
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 3,417,808 fully paid ordinary shares in Regis
Resources Limited at a weighted average exercise price of $1.53 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.
DIRECTORS’ MEETINGS
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
10
10
10
10
10
10
10
10
10
10
9
10
n/a
n/a
2
2
1
2
2
2
1
2
n/a
n/a
n/a
7
7
n/a
7
n/a
n/a
7
7
n/a
7
n/a
M Clark
R Kestel
J Mactier
F Morgan
M Okeby
P Thomas
REGIS RESOURCES // DIRECTORS' REPORT (continued) 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.
29
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
F Morgan
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 2018 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
3,000,000
75,000
-
513,230
700,000
-
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.
KPMG Australia received or are due to receive the following amounts for the provision of non-audit services:
Tax compliance services
Other advisory services
$
33,700
13,581
47,281
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.
REGIS RESOURCES // 2018 ANNUAL REPORT 30
REMUNERATION
REPORT (AUDITED)
This remuneration report for the year ended
30 June 2018 outlines the remuneration
arrangements of the Company and the Group.
This remuneration report for the year ended 30 June 2018 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 2018 are set out
below:
NAME
POSITION
TERM AS KMP
Non-Executive Directors
M Okeby
R Kestel
J Mactier
F Morgan
Executive Directors
M Clark
P Thomas
Other Executives
Deputy Chairman
Full financial year
Non-Executive Director
Full financial year
Non-Executive Director
Full financial year
Non-Executive Director
Full financial year
Executive Chairman
Full financial year
Executive Director
Full financial year
P Woodman
Chief Geological Officer
Resigned 29 March 2018
K Massey
M Ertzen
Chief Financial Officer and
Company Secretary
Full financial year
Executive General Manager -
Growth
Appointed as Executive General Manager
– Growth, effective 1 April 2018. Previously
– General Manager - Business Development
REGIS RESOURCES // 2018 ANNUAL REPORT PRINCIPLES OF REMUNERATION
The Remuneration, Nomination and Diversity Committee is charged with formulating the Group’s remuneration policy,
reviewing 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.
31
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 2018 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”).
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.
In FY18, the STI represented 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.
The chart below provides a summary of the structure of executive remuneration in the 2018 financial year:
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 Performance rights in November 2016 had 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 have a performance/
vesting period of three years.
REGIS RESOURCES // 2018 ANNUAL REPORT 32
REMUNERATION MIX – TARGET
38%
43%
35%
46%
33%
50%
Executive
Chairman
Executive
Director
Other
Executives
19%
19%
17%
Fixed remuneration
STI
LTI
ELEMENTS OF REMUNERATION IN FY18
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. In
November 2017, BDO Remuneration and Reward Pty Ltd reviewed the existing remuneration arrangements of the
Company’s KMPs and made recommendations to the Remuneration, Nomination and Diversity Committee.
Performance linked remuneration
Performance linked remuneration includes both STI and LTI and is designed to reward KMP for meeting or exceeding
their KPIs.
REGIS RESOURCES // REMUNERATION REPORT (AUDITED) (continued)
33
Rosemont Main Pit // Photo by Kaitlin Bryant
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 FY18, the Executive Chairman and Executive Director had a maximum STI opportunity of
45% and 40% respectively 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 quantitative 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 2018 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 // 2018 ANNUAL REPORT
Long Term Incentives
34
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.
How is it paid?
Executives are eligible to receive performance rights (being the issue of shares in Regis in
the future).
How much can
executives earn?
In FY18, the Executive Chairman and Executive Director had a maximum LTI opportunity of
90% and 75% respectively 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 quantitative 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 FY18 are subject to the following vesting conditions:
When is
performance
measured?
What happens if
executive leaves?
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 three year vesting period (25%(i))
The performance rights issued in FY17 have a two year performance period with the vesting
of the rights tested as at 30 June 2018. All subsequent issues of performance rights 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.
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.
What happens if
there is a change of
control?
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.
Are executives
eligible for
dividends?
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 // REMUNERATION REPORT (AUDITED) (continued) PERFORMANCE AND EXECUTIVE REMUNERATION OUTCOMES IN FY18
Actual remuneration earned by executives in FY18
The actual remuneration earned by executives in the year ended 30 June 2018 is set out below. This provides
shareholders with a view of the remuneration actually paid to executives for performance in 2018 year and the value
of LTIs that vested during the period.
35
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 2018:
KEY PERFORMANCE INDICATOR
WEIGHTING
METRIC
ACHIEVEMENT
KPI 1: EBITDA
35%
EBITDA relative to Budget
KPI 2: Production
35%
Production relative to stated guidance
Stretch target achieved
– 100% award
Threshold target achieved
– 65% award
KPI 3: Safety and Environment
30%
Reduction in safety and environmental
measures
Threshold target achieved
– 40% award
Based on this assessment, the STI payments for FY2018 to executives were recommended as detailed in the
following table:
NAME
POSITION
Mark Clark
Executive Chairman
Paul Thomas
Chief Operating Officer
Kim Massey
Chief Financial Officer & Company Secretary
ACHIEVED STI
STI AWARDED
%
$
69.83%
69.83%
69.83%
235,676
167,592
109,982
Performance against LTI measures
LTI awards granted in FY18 will be subject to testing at the end of the three year performance period on 30 June 2021.
In November 2017, after receiving approval from shareholders at the AGM, 430,440 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”). Mr Woodman resigned from his position as
Chief Geologist Officer 29 March 2018 and forfeited LTI rewards. Further details of the grant, including performance
conditions and the calculation of fair value is disclosed in the Note 23 to the financial statements.
LTI awards granted and approved by shareholders in November 2016 were tested at the end of the two year
performance period on 30 June 2018. The Board resolved to vest 100% of the performance rights granted in November
2016, and further instructed that the shares be issued following the release of the 2018 financial report. Further
details of the grant, including performance conditions and the calculation of fair value is disclosed in Note 23 to the
financial statements.
A number of performance conditions determined the vesting of the performance rights. The outcomes of these
performance conditions as tested for the two year performance period ending on 30 June 2018 were as follows:
PERFORMANCE CONDITION WEIGHTING METRIC
ACHIEVEMENT
Relative TSR
25%
Company’s relative total shareholder return
measured against 17 comparator mining companies
Stretch target achieved
– 100% award
Absolute TSR
25%
Company’s absolute TSR
EPS
25%
Growth in the Company’s earnings per share
Reserves Growth
25%
Growth in the Company’s ore reserves
Stretch target achieved
– 100% award
Stretch target achieved
– 100% award
Stretch target achieved
– 100% award
REGIS RESOURCES // 2018 ANNUAL REPORT Based on the outcomes of the performance conditions, the following 2016 performance rights vested and became
exercisable on 30 June 2018:
36
NAME
POSITION
ACHIEVED LTI
LTI AWARDED
Mark Clark
Executive Chairman
Paul Thomas
Chief Operating Officer
Peter Woodman(i)
Chief Geological Officer
Kim Massey
Chief Financial Officer &
Company Secretary
%
No. Rights Vested
Fair Value
100%
100%
-
100%
168,000
95,333
-
$319,326
$181,205
-
69,333
$131,785
(i) Mr Woodman resigned from his position as Chief Geological Officer on 29 March 2018, resulting in the lapsing of his performance rights prior to
vesting.
During the year the following 2017 performance rights were granted:
NAME
POSITION
ACHIEVED LTI
LTI AWARDED
Mark Clark
Executive Chairman
Paul Thomas
Chief Operating Officer
Peter Woodman(i)
Chief Geological Officer
Kim Massey
Chief Financial Officer &
Company Secretary
%
No. Rights Granted
Fair Value
-
-
-
-
173,554
113,636
71,625
$517,581
$338,891
$213,604
71,625
$213,604
(i) Mr Woodman resigned from his position as Chief Geological Officer on 29 March 2018, resulting in the lapsing of his performance rights prior to
vesting.
Garden Well // Photo by Christine Darbyshire
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Statutory performance indicators
The Company aims to align its executive remuneration to its 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.
37
2018
$’000
2017
$’000
2016
$’000
2015
$’000
2014
$’000
Revenue
606,495
543,799
502,019
465,320
371,933
Net profit/(loss) after tax
174,231
138,163
111,793
86,920
(147,830)
Basic earnings/(loss) per share (cents)
Diluted earnings/(loss) per share (cents)
34.60
34.35
27.59
27.29
22.37
22.22
17.39
17.39
(29.68)
(29.68)
Net assets
636,842
538,392
481,848
409,973
321,060
PERFORMANCE AND EXECUTIVE REMUNERATION ARRANGEMENTS IN FY19
Following a review by the Remuneration, Nomination and Diversity Committee and after feedback from shareholders
and external advisors, the Board resolved to change the structure of the STI awards for the 2019 and subsequent
financial years. The STI awarded will now be payable with 50% in cash, payable 3 months after the end of the financial
year and 50% in performance rights which vest 12 months after the end of the financial year. Disqualifying events will
apply to the performance rights prior to vesting, including non-performance, a workplace fatality or material one-off
write downs and at the discretion of the Board. Subsequent to the end of the 2018 financial year, the Board resolved
to set STI and LTI hurdles as follows for the 2019 financial year:
COMPONENT
LINKS TO FY2019 PERFORMANCE
Total Fixed Remuneration (TFR)
Salaries awarded effective 1 July 2018 used as basis for determining the value
component for FY2019 STI and LTI.
The maximum STI opportunity that each KMP can earn are:
Executive Chairman
70%
Chief Operating Officer 65%
Other executives
60%
Short Term Incentives (STI)
The following KPIs were chosen for the 2019 financial year:
KPI 1: EBITDA relative to budget (20%(i));
KPI 2: Production relative to stated guidance (20%(i));
KPI 3: Safety and environmental performance measures (20%(i));
KPI 4: McPhillamys Project targets as determined by the Board (20%); and
KPI 5: Rosemount underground targets as determined by the Board (20%).
Long Term Incentives (LTI)
The performance rights issued in 2019 are subject to the following vesting
conditions:
Relative Total Shareholder Return (20%(i)) measured on a sliding scale against
a select peer group of comparator companies (ASX code: DCN, EVN, NCM, NST,
OGC, PRU, RSG, SAR, SBM,WGX).
Absolute Total Shareholder Return (20%(i));
Absolute Earnings Per Share (“EPS”) (15%(i)) measured against a pre-determined
target(ii) set by the Board (as an average across three 12 month periods);
Reserve growth in excess of depletion over the three-year vesting period (15%(i));
McPhillamys Project targets as determined by the Board (15%); and
Rosemount underground targets as determined by the Board (15%).
(i) Represents the maximum award if stretch targets are met.
REGIS RESOURCES // 2018 ANNUAL REPORT SERVICE CONTRACTS
38
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:
A term of three years commencing 4 May 2018;
Fixed remuneration of $821,250 per annum inclusive of superannuation (2017: $766,500) 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
3 months plus 9 months’ salary
12 months
with reason
Not less than 3 months
Not less than 3 months
serious misconduct
0 – 1 month
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 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
3 months
serious misconduct
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.
REGIS RESOURCES // REMUNERATION REPORT (AUDITED) (continued) NON-EXECUTIVE DIRECTORS
Total remuneration for all non-executive directors, last voted upon by shareholders at the 2017 AGM, is not to exceed
$700,000 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 additional services to the Company and in these cases they are paid fees in line with industry rates.
39
The Board has resolved to increase non-executive director fees for 2019. The increase will include both base fees and
chair fees and are within the agreed pool for non-executive directors fees.
KEY MANAGEMENT PERSONNEL REMUNERATION
Table 1: Remuneration for the year ended 30 June 2018
SHORT TERM
POST
EMPLOYMENT
LONG-TERM
BENEFITS
SHARE-BASED
PAYMENT
2018
SALARY &
FEES
CASH
REWARDS
NON-
MONETARY
BENEFITS*
SUPER-
ANNUATION
ACCRUED
ANNUAL &
LONG SERVICE
LEAVE#
OPTIONS &
RIGHTS+
TERMINATION
PAYMENTS
$
Non-executive directors
R Kestel(i)
J Mactier
F Morgan
97,000
85,000
85,000
M Okeby(ii)
302,468
Executive directors
$
-
-
-
-
$
-
-
-
-
$
9,215
8,075
8,075
29,606
$
-
-
-
-
$
-
-
-
-
M Clark(iv)
701,114 235,676
4,756
25,000
69,491
861,186
P Thomas(iv)
566,672
167,592
4,756
25,000
54,223
305,481
Other executives
K Massey(iv)
382,229 109,982
4,756
25,000
38,486
331,032
$
-
-
-
-
-
-
-
PERFOR-
MANCE
RELATED
TOTAL
$
%
106,215
93,075
93,075
332,074
-
-
-
-
1,897,223
57.81%
1,123,724
42.10%
891,485
49.47%
P Woodman(iii, iv)
273,708
M Ertzen(v)
75,115
-
-
3,567
1,189
19,728
19,837
(131,075)
5,619
191,384
-
7,363
8,025
24,853
-
116,545
21.32%
Total
2,568,306 513,250
19,024
157,062
190,062
1,391,477
5,619 4,844,800
* 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.
Options have been vested during the year for KMPs as detailed in Table 3. Table 3 reflects the realised benefits of share-based payments for the
year.
(i) Mr Kestel’s fees include an additional $12,000 for chairing the Board Committees.
(ii) Mr Okeby’s fees includes $207,468 for additional services provided relating to the McPhillamys project.
(iii) Mr Woodman resigned as Chief Geological Officer effective 29 March 2018.
(iv) 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.
(v) Mr Ertzen was appointed as Executive General Manager - Growth on 1 April 2018. The remuneration presented above is only for the period
subsequent to this appointment.
REGIS RESOURCES // 2018 ANNUAL REPORT Table 2: Remuneration for the year ended 30 June 2017
40
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
R Kestel
J Mactier
F Morgan
M Okeby
7,083
97,000
85,000
52,362
117,076
$
-
-
-
-
-
Executive directors
M Clark
653,420
205,320
P Thomas
521,590
125,474
Other executives
K Massey
373,076
91,253
P Woodman
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.
Rosemont Main Pit // Photo by Marty McKenzie
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Table 3: Voluntary information – Non-IFRS – Remuneration received by executives for the
year ended 30 June 2018
41
The amounts disclosed below as executive KMP remuneration for 2018 reflect the realised benefits received by each
KMP during the reporting period. The remuneration values disclosed below have been determined as follows:
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.
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 2015 (Mr Thomas and Mr Massey), November 2015 (M Clark)
and January 2016 (Mr Woodman). The performance rights that vested during the year were granted in November 2016.
FIXED REMUNERATION
AWARDED STI (CASH)
VESTED LTI
TOTAL VALUE
$
$
$
$
Executive directors
M Clark
P Thomas
Other executives
K Massey
P Woodman(i)
M Ertzen(ii)
Total executive KMP
Non-executive directors
Total KMP remuneration
771,256
607,006
442,756
336,470
86,052
2,243,540
624,439
2,867,979
235,676
167,592
2,077,500
692,500
109,982
1,435,000
-
-
975,000
-
3,084,432
1,467,098
1,987,738
1,311,470
86,052
513,250
5,180,000
7,936,790
-
-
624,439
513,250
5,180,000
8,561,229
(i) Mr Woodman resigned as Chief Geological Officer on 29 March 2018.
(ii) Mr Ertzen was appointed as Executive General Manager - Growth on 1 April 2018. The remuneration presented above is only for the period
subsequent to this appointment.
The amounts disclosed above are not the same as the remuneration expensed in relation to each KMP in accordance
with the accounting standards ($4,844,800 for 2018, 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 accuracy of information in this section has been audited together with the rest of the remuneration report.
REGIS RESOURCES // 2018 ANNUAL REPORT Tables 4 & 5: Rights and options over equity instruments granted as compensation
42
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
NO.
GRANT
DATE
FAIR VALUE
PER OPTION
AT GRANT
DATE
EXERCISE
PRICE PER
OPTION
EXPIRY
DATE
VESTING
DATE
% VESTED
DURING
THE YEAR
% FORFEITED
DURING THE
YEAR
NO.
-
-
-
-
-
M Clark
M Clark
750,000 12 Nov 15
750,000 12 Nov 15
$1.04
$1.27
$1.40 11 Aug 19 11 Aug 17
750,000
100%
$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
250,000
100%
P Thomas
250,000 12 Aug 15
P Woodman(i)
500,000
25 Jan 16
P Woodman(i)
500,000
25 Jan 16
$0.74
$1.00
$1.29
$1.40 11 Aug 19 11 Aug 18
-
-
$2.34
6 Jan 20 25 Jan 18
500,000
100%
$2.34
6 Jan 20 25 Jan 19
-
-
100%
K Massey
500,000 12 Aug 15
$0.58
$1.40 11 Aug 19 11 Aug 17
500,000
100%
K Massey
500,000 12 Aug 15
M Ertzen(ii)
50,000
5 Jul 17
M Ertzen(ii)
50,000
5 Jul 17
M Ertzen(ii)
200,000 12 Aug 15
$0.74
$1.28
$1.87
$0.74
$1.40 11 Aug 19 11 Aug 18
$3.90
1 Jul 21
5 Jul 19
$3.90
1 Jul 21
5 Jul 20
$1.40 11 Aug 19 11 Aug 18
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
4,300,000
2,000,000
(i) Mr Woodman resigned as Chief Geological Officer on 29 March 2018 and forfeited the right to the unvested options held at that date.
(ii) Mr Ertzen was appointed as Executive General Manager - Growth on 1 April 2018. Only options vested subsequent to his appointment or remain
outstanding at the end of the year are presented in the table above.
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 current year and in previous
years and which have vested during or remain outstanding at the end of the year are provided below.
RIGHTS
GRANTED
NUMBER OF RIGHTS TO:
VESTING CONDITION
GRANT
DATE
FAIR VALUE
AT GRANT
DATE
TEST DATE
M CLARK
P THOMAS
K MASSEY P WOODMAN(I)
% VESTED
DURING
THE YEAR
%
FORFEITED
DURING
THE YEAR
Relative TSR
23 Nov 17
$2.68 30 Jun 20
43,388
28,409
17,906
Absolute TSR
23 Nov 17
$1.86 30 Jun 20
43,389
28,409
17,906
Earnings per share 23 Nov 17
$3.69 30 Jun 20
43,388
28,409
17,906
Ore reserves
23 Nov 17
$3.69 30 Jun 20
43,389
28,409
17,907
Relative TSR
18 Nov 16
$1.51
30 Jun 18
42,000
23,833
17,333
Absolute TSR
18 Nov 16
$0.97
30 Jun 18
42,000
23,833
17,333
Earnings per share 18 Nov 16
$2.56 30 Jun 18
42,000
23,833
17,333
17,906
17,906
17,906
17,907
17,333
17,333
17,333
Ore reserves
18 Nov 16
$2.56 30 Jun 18
42,000
23,834
17,334
17,334
Total rights
341,554
208,969
140,958
140,958
Value of rights granted during the year
$517,581 $338,891 $213,604
$213,604
-
-
-
-
83%
83%
83%
83%
17%
17%
17%
17%
17%
17%
17%
17%
(i) Mr Woodman resigned as Chief Geological Officer on 29 March 2018 and forfeited the right to the unvested performance rights held at that date.
REGIS RESOURCES // REMUNERATION REPORT (AUDITED) (continued) In relation to the performance rights granted in November 2016, the two year performance period during which the
performance rights were tested ended on 30 June 2018 with the testing occurring within 60 days after that date. Any
performance rights which did not vest lapsed after testing. There is no re-testing of performance rights. In relation
to the performance rights granted in November 2017, there is a three year performance period which ends on 30 June
2020.
43
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 34.
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 2017 to 30 June 2020). No performance rights were exercised during the year.
Table 6: Rights and options over equity instruments
The movement during the reporting period, by number of options over ordinary shares in the Company held, directly,
indirectly or beneficially, by each key management person, including their related parties, is as follows:
HELD AT START
OF PERIOD
HELD AT END
OF PERIOD
VESTED AT 30 JUNE 2018
1 JULY 2017
GRANTED AS
REMUNERATION
EXERCISED
NET CHANGE
OTHER
30 JUNE 2018
TOTAL
EXERCISABLE
NOT
EXERCISABLE
Options
M Clark(i)
1,500,000
P Thomas(ii)
500,000
K Massey(iii)
1,000,000
P Woodman(iv)
1,000,000
M Ertzen(v)
n/a
-
-
-
-
-
Rights
M Clark
P Thomas
K Massey
P Woodman(iv)
168,000
95,333
69,333
69,333
173,554
113,636
71,625
71,625
(750,000)
(250,000)
(500,000)
-
-
-
750,000
250,000
500,000
(500,000)
(500,000)
n/a
300,000
300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
341,554
168,000
168,000
208,969
95,333
95,333
140,958
69,333
69,333
(140,958)
n/a
-
-
-
-
-
-
-
-
-
-
-
(i) The intrinsic value of options exercised by Mr Clark during the year was $2,077,500. Mr Clark was issued with 750,000 ordinary shares. No amounts
remain unpaid on the shares issued.
(ii) The intrinsic value of options exercised by Mr Thomas during the year was $692,500. Mr Thomas exercised his options using the cashless exercise
feature available under the Regis ESOP and was issued with 168,605 ordinary shares as a result. No amounts remain unpaid on the shares issued.
(iii) The intrinsic value of options exercised by Mr Massey during the year was $1,435,000. Mr Massey exercised his options using the cashless exercise
feature available under the Regis ESOP and was issued with 336,066 ordinary shares as a result. No amounts remain unpaid on the shares issued.
(iv) The intrinsic value of options exercised by Mr Woodman during the year was $975,000. Mr Woodman exercised his options using the cashless
exercise feature available under the Regis ESOP and was issued with 236,486 ordinary shares as a result. No amounts remain unpaid on the shares
issued. Mr Woodman resigned as Chief Geological Officer on 29 March 2018 and forfeited all unvested options and rights held at that date.
(v) Mr Ertzen was appointed as Executive General Manager - Growth on 1 April 2018. “Net change other” represents the number of options and rights
held at this date. No options or rights were granted or exercised subsequent to this appointment.
There were no options granted to KMPs during the year, apart from options granted to Mr Ertzen prior to his
appointment as a KMP. All unvested options and rights held by Mr Woodman at the date of his resignation were
forfeited. Rights granted in the prior year were tested on 30 June 2018 against performance criteria – the portion
relating to achieved performance criteria vested and were exercised on that date, and the remaining rights were
forfeited. There have been no alterations to the terms and conditions of options or rights awarded as remuneration
since their award date.
REGIS RESOURCES // 2018 ANNUAL REPORT Table 7: Shareholdings of key management personnel
44
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
R Kestel
J Mactier
F Morgan
Executive directors
M Clark
P Thomas
Other executives
P Woodman(i)
K Massey
M Ertzen(ii)
Total
HELD AT
1 JULY 2017
ON EXERCISE OF
OPTIONS
NET CHANGE
OTHER
HELD AT
30 JUNE 2018
700,000
75,000
-
513,230
-
-
-
-
-
-
-
-
700,000
75,000
-
513,230
2,460,000
750,000
(210,000)
3,000,000
-
-
-
168,605
(168,605)
236,486
(236,486)
336,066
(336,066)
-
n/a
-
n/a
-
200,000
200,000
3,748,230
1,491,157
(751,157)
4,488,230
(i) Mr Woodman resigned as Chief Geological Officer on 29 March 2018. He did not hold any shares at this date.
(ii) Mr Ertzen was appointed as Executive General Manager - Growth on 1 April 2018. “Net change other” represents the number of shares held at this
date. There was no movement in Mr Ertzen’s shareholding subsequent to this appointment.
Unless stated otherwise, “Net change other” relates to on-market purchases and sales of shares.
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.
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
For the year ended 30 June 2018, services totalling $645,073 (2017: $335,302) have been provided on normal commercial
terms to the Group by Mintrex Pty Ltd, of which Mrs Morgan is Managing Director, Chief Executive Officer and a
shareholder. The Company engaged Mintrex during the financial year to engineer preliminary plant designs for the
McPhillamys Project. Mrs Morgan and Mintrex have structured their management of this engineering project to
ensure she has no involvement in the control or direction of the work. The balance outstanding at 30 June was
$30,249, exclusive of GST.
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, 27 August 2018
REGIS RESOURCES // REMUNERATION REPORT (AUDITED) (continued) AUDITOR’S INDEPENDENCE DECLARATION
45
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 2018 there have been:
i. no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
ii. no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
R Gambitta
Partner
Partner
27 August 2018
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 // 2018 ANNUAL REPORT
BMM Software use // Photo by Florent Etievant
Financial
Statements
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
For the year ended 30 June 2018
47
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 will not 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
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
23
15
3
18
5
CONSOLIDATED
2018
$’000
2017
$’000
606,495
543,799
(343,585)
(335,827)
262,910
207,972
3,396
4,962
(1,818)
(8,479)
(3,231)
(584)
(636)
(353)
(1,011)
(1,273)
248,921
(74,690)
174,231
174,231
-
(188)
78
-
-
(110)
174,121
(2,117)
(5,521)
(3,222)
(585)
(312)
(2,939)
(936)
(1,165)
196,137
(57,974)
138,163
138,163
(641)
(4,177)
1,424
(2,180)
654
(4,920)
133,243
Total comprehensive income attributable to members of the parent
174,121
133,243
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
34.60
34.35
27.59
27.29
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
REGIS RESOURCES // 2018 ANNUAL REPORT CONSOLIDATED
BALANCE SHEET
48
As at 30 June 2018
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
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
19
10
11
12
13
14
16
18
17
18
22
17
21
21
CONSOLIDATED
2018
$’000
181,118
21,160
5,954
43,438
-
344
1,354
2017
$’000
119,428
24,934
6,833
39,328
260
263
1,197
253,368
192,243
45,986
195,340
171,570
29,578
124,116
2,572
569,162
822,530
48,635
806
14,242
3,418
-
67,101
36
75,098
43,453
118,587
185,688
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
636,842
538,392
433,248
29,997
173,597
431,491
26,876
80,025
636,842
538,392
The above balance sheet should be read in conjunction with the accompanying notes.
REGIS RESOURCES // 2018 ANNUAL REPORT CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
For the year ended 30 June 2018
49
At 1 July 2017
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
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
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
431,491
25,049
1,717
110
80,025
538,392
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,231
-
-
-
-
-
-
-
-
-
-
-
-
(110)
(110)
(110)
174,231
174,231
-
-
-
-
(110)
(110)
174,231
174,121
-
-
-
-
-
3,231
(80,659)
(80,659)
-
1,757
173,597 636,842
-
-
-
-
-
-
(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
431,335
21,827
3,243
3,504
21,939 481,848
Shares issued, net of transaction costs
1,757
At 30 June 2018
433,248
28,280
1,717
Shares issued, net of transaction costs
156
At 30 June 2017
431,491
25,049
1,717
110
80,025 538,392
The above statement of changes in equity should be read in conjunction with the accompanying notes.
REGIS RESOURCES // 2018 ANNUAL REPORT CONSOLIDATED
STATEMENT OF CASH FLOWS
50
For the year ended 30 June 2018
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
NOTE
CONSOLIDATED
2018
$’000
2017
$’000
608,200
540,048
(314,824)
(300,416)
1,197
2,087
(69)
4
1,302
1,504
(126)
-
(36,868)
(36,230)
Net cash from operating activities
7
259,727
206,082
Cash flows from investing activities
Acquisition of property, plant and equipment
Proceeds on disposal of property, plant and equipment
Payments for exploration and evaluation (net of rent refunds)
Payments for acquisition of exploration assets (net of cash)
Payments for intangible assets
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
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
7
(37,452)
(23,395)
(144)
2
(32,410)
(31,564)
(50)
(1,490)
(82)
-
(14,053)
(31,949)
(3,370)
(802)
-
4,154
(9,506)
(40,301)
(117,630)
(104,782)
1,810
(53)
175
(19)
(80,659)
(80,077)
(1,505)
(1,486)
(80,407)
(81,407)
61,690
119,428
181,118
19,893
99,535
119,428
The above statement of cash flows should be read in conjunction with the accompanying notes.
REGIS RESOURCES // 2018 ANNUAL REPORT Garden Well Diamond drilling // Photo by Richard Spilsbury
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
54
55
55
56
58
60
61
62
62
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
63
64
64
65
66
67
69
69
71
71
72
Notes to the
Financial Statements
Capital structure, financial instruments and risk 73
Other disclosures
18. Net Debt and Finance Costs
19. Financial Assets
20. Financial Risk Management
21. Issued Capital and Reserves
74
75
75
78
22. Deferred Income Tax
23. Share-based Payments
24. Related Parties
25. Parent Entity Information
26. Commitments
27. Contingencies
28. Auditor’s Remuneration
29. Subsequent Events
79
79
81
85
86
87
88
88
88
30. New Accounting Standards and Interpretations 89
Tooheys Well Pre-Production // Photo by Richard Spilsbury
BASIS OF PREPARATION
54
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 2
516 Hay 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 27 August 2018.
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 30
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 30 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 24.
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.
55
Note 3
Note 10
Note 12
Note 14
Note 15
Note 17
Note 22
Note 23
Expenses
Inventories
Exploration and evaluation assets
Mine properties
Impairment
Provisions
Deferred income tax
Share-based payments
Page 58
Page 65
Page 67
Page 69
Page 71
Page 72
Page 79
Page 81
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, Gloster, Anchor and Dogbolter and Duketon South Operations (“DSO”), currently incorporating Garden
Well, Rosemont, Erlistoun and Tooheys Well. The segments are unchanged from those reported at 30 June 2017. A
number of new mining operations at satellite pits will commence in the next several years. In addition to current pits,
DNO will include Petra as it will be processed through the Moolart Well processing plant. DSO will add Baneygo 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.
REGIS RESOURCES // 2018 ANNUAL REPORT 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.
56
The following table presents financial information for reportable segments for the years ended 30 June 2018 and
30 June 2017:
DUKETON NORTH
OPERATIONS
DUKETON SOUTH
OPERATIONS
UNALLOCATED
TOTAL
2018
2017
2018
2017
2018
2017
2018
2017
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Continuing Operations
Segment revenue
Sales to external customers
175,568 170,065 428,857
372,153
-
- 604,425
542,218
Other revenue
-
-
-
-
2,070
1,581
2,070
1,581
Total segment revenue
175,568 170,065 428,857
372,153
2,070
1,581 606,495 543,799
Total revenue per the statement of
comprehensive income
606,495 543,799
Interest expense
Impairment of non-current assets
-
-
-
-
-
-
-
-
69
126
69
126
353
2,939
353
2,939
Depreciation and amortisation
17,677
18,061
46,635
39,392
265
218
64,577
57,671
Depreciation capitalised
Total depreciation and amortisation
recognised in the statement of
comprehensive income
Segment result
Segment net operating profit/(loss)
before tax
Segment assets
(140)
(90)
64,437
57,581
84,438
80,724
177,167
127,455 (12,684)
(12,042)
248,921
196,137
Segment assets at balance date
88,429
82,066
338,141 308,108 395,960 295,690 822,530 685,864
Capital expenditure for the year
18,997
18,436
58,701
46,622
51,614
32,306
129,312
97,364
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.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) Interest
Interest income is recognised as it accrues using the effective interest method.
57
Revenue
Gold sales
Interest
CONSOLIDATED
2018
$’000
2017
$’000
604,425
542,218
2,070
1,581
606,495
543,799
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”).
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)
2018
2017
ounces
ounces
2018
$/oz
2017
$/oz
2018
2017
2018
2017
$’000
$’000
$’000
$’000
Within one year
- Spot deferred contracts(ii)
388,711
396,406
1,555
1,551
604,635
614,718
(54,151)
(25,386)
388,711
396,406
604,635
614,718
(54,151)
(25,386)
Mark-to-market has been calculated with reference to the following spot price at period end $1,693/oz $1,615/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 $1,416/oz to $1,821/oz (2017: $1,408/oz to $1,810/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
2018
$’000
2,165
1,299
(72)
4
3,396
2017
$’000
2,977
1,913
72
-
4,962
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 20,000 ounces
with a weighted average exercise price of $1,684/oz (2017: 35,000 ounces at A$1,716/oz). Offsetting the premium
income received during the current year is the fair value of open contracts at balance date, recognised on the
balances sheet as “derivative liabilities”.
REGIS RESOURCES // 2018 ANNUAL REPORT 3. EXPENSES
58
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
CONSOLIDATED
2018
$’000
2017
$’000
252,948
255,074
26,325
29,703
34,609
23,300
31,484
25,969
343,585
335,827
Depreciation
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
2018
$’000
29,968
34,609
(140)
64,437
2017
$’000
31,702
25,969
(90)
57,581
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued)
KEY ESTIMATES AND ASSUMPTIONS
Unit-of-production method of depreciation/amortisation
59
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
23
CONSOLIDATED
2018
$’000
2017
$’000
38,750
35,700
3,569
3,231
1,473
3,966
50,989
(6,047)
3,235
3,222
335
2,425
44,917
(4,826)
44,942
40,091
384
(115)
269
-
867
144
1,011
380
(114)
266
49
804
83
936
REGIS RESOURCES // 2018 ANNUAL REPORT 4. EARNINGS PER SHARE
60
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
174,231
138,163
CONSOLIDATED
2018
$’000
2017
$’000
Weighted average number of shares
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)
501,020
499,854
2,597
928
503,617
500,782
2,885
692
5,225
247
Weighted average number of ordinary shares adjusted for the effect of dilution
507,194
506,254
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
61
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% (2017: 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
2018
$’000
2017
$’000
47,054
1,862
28,749
(2,975)
74,690
(78)
-
(78)
248,921
74,676
969
158
(1,113)
74,690
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
REGIS RESOURCES // 2018 ANNUAL REPORT 6. DIVIDENDS
62
Declared and paid during the year:
Dividends on ordinary shares
CONSOLIDATED
2018
$’000
2017
$’000
Final dividend for 2017: 8 cents per share (2016: 9 cents per share)
40,312
45,007
Interim franked dividend for 2018: 8 cents per share
(2017: 7 cents per share)
Proposed by the directors after balance date but not recognised as a
liability at 30 June:
Dividends on ordinary shares
40,347
35,070
80,659
80,077
Final dividend for 2018: 8 cents per share (2017: 8 cents per share)
40,389
40,143
Dividend franking account
Amount of franking credits available to shareholders of Regis Resources
Limited for subsequent financial years
19,974
5,625
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 2018, the Group had no undrawn, committed borrowing facilities available (2017: 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
CONSOLIDATED
2018
$’000
181,118
-
181,118
2017
$’000
69,428
50,000
119,428
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) Restrictions on cash
The Group is required to maintain $203,000 (2017: $161,000) on deposit to secure bank guarantees in relation to the
Perth office lease and two new office leases in NSW. The amount will be held for the term of the lease. In September
2018 the Group will be required to provide a bank guarantee of $280,000 in relation to the new Perth office lease.
Refer to note 26.
63
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
OPERATING ASSETS AND LIABILITIES
NOTE
15
18
CONSOLIDATED
2018
$’000
2017
$’000
174,231
138,163
353
1,204
144
(30)
3,231
(2,165)
64,437
3,775
45
2,939
1,039
83
(683)
3,222
(2,977)
57,581
(2,170)
(365)
(13,476)
(18,669)
(119)
12,049
(9,289)
25,772
(435)
(64)
(7,308)
7,539
29,053
(1,301)
259,727
206,082
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 74.
REGIS RESOURCES // 2018 ANNUAL REPORT 8. GOLD BULLION AWAITING SETTLEMENT
64
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
2018
$’000
2017
$’000
Current
Gold bullion awaiting settlement
21,160
24,934
At balance date, gold bullion awaiting settlement comprised 12,447 ounces valued at a weighted average realisable
value of $1,700/oz (2017: 15,487 ounces at $1,610/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
2018
$’000
3,447
1,637
-
201
441
228
2017
$’000
3,323
1,570
974
217
498
251
5,954
6,833
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) 10. INVENTORIES
Accounting Policy
65
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
2018
$’000
2017
$’000
26,394
25,894
9,123
4,263
3,658
6,098
4,254
3,082
43,438
39,328
45,986
35,452
At 30 June 2017, all inventories were carried at cost, except for a portion of ore stockpiles that 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.
At 30 June 2018, there was no expense recognised in costs of goods sold for inventories carried at net realisable value.
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 // 2018 ANNUAL REPORT 11. PROPERTY, PLANT AND EQUIPMENT
66
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
Net carrying amount at 1 July 2017
Additions
Depreciation expense
Transfers to mine properties
Transfers between classes
Rehabilitation provision
adjustments
Disposals
$’000
16,488
17,264
-
-
-
-
-
$’000
$’000
303
104,224
-
8,496
(76)
(18,705)
-
-
-
-
-
1,180
(29)
(192)
$’000
600
249
(194)
-
169
-
-
$’000
$’000
$’000
52,288
8,485
182,388
3,171
11,629
40,809
(10,993)
-
(29,968)
-
(26)
5,298 (6,647)
2,358
-
-
-
(26)
-
2,329
(192)
Net carrying amount at 30 June 2018
33,752
227
94,974
824
52,122
13,441
195,340
At 30 June 2018
Cost
33,752
762
243,392
2,218
112,955
13,441
406,520
Accumulated depreciation
-
(535)
(148,418)
(1,394)
(60,833)
-
(211,180)
Net carrying amount
33,752
227
94,974
824
52,122
13,441
195,340
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)
616
108
(176)
-
52
-
-
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 1 July 2016
Cost
16,488
725
223,997
Accumulated depreciation
-
(384)
(109,388)
Net carrying amount
16,488
341
114,609
At 30 June 2017
Cost
16,488
762
234,758
Accumulated depreciation
-
(459)
(130,534)
Net carrying amount
16,488
303
104,224
1,663
(1,047)
616
1,817
(1,217)
600
88,104
8,048
339,025
(40,543)
-
(151,362)
47,561
8,048
187,663
102,539
8,485
364,849
(50,251)
-
(182,461)
52,288
8,485
182,388
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) 12. EXPLORATION AND EVALUATION ASSETS
Accounting Policy
67
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 under development
Transferred to mine properties
Balance at 30 June
Impairment
NOTE
15
13
14
CONSOLIDATED
2018
$’000
151,735
33,444
50
(353)
(12,918)
(388)
171,570
2017
$’000
123,739
31,976
3,382
(2,917)
-
(4,445)
151,735
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
9,118
27,323
5,466
13,610
116,053
171,570
8,868
14,281
12,757
9,267
106,562
151,735
REGIS RESOURCES // 2018 ANNUAL REPORT KEY ESTIMATES AND ASSUMPTIONS
68
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.
Exploration expenditure commitments
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
2018
$’000
2017
$’000
1,668
2,317
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.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) 13. MINE PROPERTIES UNDER DEVELOPMENT
Accounting Policy
69
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
12
14
CONSOLIDATED
2018
$’000
-
17,831
12,918
(1,168)
(3)
29,578
2017
$’000
1,199
9,158
-
(1,111)
(9,246)
-
Balance at beginning of period
Pre-production expenditure capitalised
Transferred from exploration
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.
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.
Other mine properties
Other mine properties represent 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.
REGIS RESOURCES // 2018 ANNUAL REPORT 70
Net carrying amount at 1 July 2017
Additions
Transfers from exploration and evaluation assets
Transfers from pre-production
Transfers from property, plant and equipment
Rehabilitation provision adjustment
CONSOLIDATED
PRODUCTION
STRIPPING
COSTS
PRE-STRIP
COSTS
OTHER MINE
PROPERTIES
$’000
$’000
$’000
TOTAL
$’000
41,887
30,188
-
-
-
-
40,819
40,538
123,244
7,796
-
-
-
-
416
388
3
-
38,400
388
3
-
(3,310)
(3,310)
Amortisation expense
(11,158)
(12,257)
(11,194)
(34,609)
Net carrying amount at 30 June 2018
60,917
36,358
26,841
124,116
At 30 June 2018
Cost
Accumulated amortisation
Net carrying amount
93,751
89,950
94,300
278,001
(32,834)
(53,592)
(67,459)
(153,885)
60,917
36,358
26,841
124,116
Net carrying amount at 1 July 2016
Additions
Transfers from exploration and evaluation assets
19,969
22,398
-
37,334
11,213
-
Transfers from pre-production
4,321
3,606
Transfers from property, plant and equipment
Rehabilitation provision adjustment
-
-
-
-
26,055
7,535
4,445
1,319
18
83,358
41,146
4,445
9,246
18
11,000
11,000
Amortisation expense
(4,801)
(11,334)
(9,834)
(25,969)
Net carrying amount at 30 June 2017
41,887
40,819
40,538
123,244
At 30 June 2017
Cost
Accumulated amortisation
Net carrying amount
At 1 July 2016
Cost
Accumulated amortisation
Net carrying amount
KEY ESTIMATES AND ASSUMPTIONS
Production stripping costs
63,563
82,154
96,803
242,520
(21,676)
(41,335)
(56,265)
(119,276)
41,887
40,819
40,538
123,244
36,843
67,335
72,486
176,664
(16,874)
(30,001)
(46,431)
(93,306)
19,969
37,334
26,055
83,358
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.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) 15. IMPAIRMENT OF NON-FINANCIAL ASSETS
Accounting policy
71
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
2018
$’000
353
2017
$’000
2,939
An impairment loss of $353,000 (2017: $343,000) has been recognised in relation to tenements that were surrendered,
relinquished or expired during the year.
For the year ended 30 June 2017, 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
expired in October 2017 and no further expenditure was incurred for the year ended 30 June 2018.
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.
16. TRADE AND OTHER PAYABLES
Accounting Policies
Trade payables
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.
REGIS RESOURCES // 2018 ANNUAL REPORT Employee entitlements
72
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
2018
$’000
21,075
15,756
3,329
8,475
48,635
2017
$’000
16,892
16,628
2,881
7,318
43,719
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.
Long service leave
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.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) 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
73
CONSOLIDATED
2018
$’000
440
150
2,828
3,418
1,737
41,716
43,453
47,631
3,910
(1,145)
(7,056)
1,204
44,544
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
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.
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.
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.
REGIS RESOURCES // 2018 ANNUAL REPORT 18. NET DEBT AND FINANCE COSTS
74
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
Less: cash and cash equivalents
Net cash
Interest-bearing liabilities
Finance lease commitments
NOTE
CONSOLIDATED
2018
$’000
2017
$’000
806
1,506
36
841
7
181,118
180,276
119,428
117,081
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 26.
Finance costs
Interest expense
Unwinding of discount on provisions
Borrowing costs
CONSOLIDATED
2018
$’000
69
1,204
1,273
2017
$’000
126
1,039
1,165
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.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) 19. FINANCIAL ASSETS
Accounting Policy
75
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
2018
$’000
2017
$’000
Current
Financial assets at amortised cost – term deposit
344
263
20. FINANCIAL RISK MANAGEMENT
The Group holds financial instruments for the following purposes:
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.
REGIS RESOURCES // 2018 ANNUAL REPORT Credit Risk
76
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 holdings are with Macquarie Bank Limited, an Australian bank regulated by APRA and with a short term
S&P rating of A-1. 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.
30 JUNE 2018
($’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
45,306
(45,306)
(45,306)
Finance leases
842
(856)
(428)
Total
46,148
(46,162)
(45,734)
-
(392)
(392)
-
(36)
(36)
-
-
-
-
-
-
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
Trade and other payables
40,764
(40,764)
(40,764)
Derivative liabilities
Finance lease
Total
102
2,347
(102)
(2,414)
(102)
(811)
43,213
(43,280)
(41,677)
-
-
(747)
(747)
-
-
(820)
(820)
-
-
(36)
(36)
-
-
-
-
Assets pledged as security
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 2018, the Group did not have any financial guarantee liabilities (2017: Nil).
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) 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.
77
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 20). 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.
The Group continued 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. During the 2018 financial year this hedge arrangement fixed a significant proportion
(approximately two thirds) of the total estimated annual diesel usage at the Group’s Duketon operations.
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
2018
$’000
344
(842)
(498)
2017
$’000
50,263
(2,347)
47,916
180,854
69,167
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.
REGIS RESOURCES // 2018 ANNUAL REPORT Fair Values
78
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.
21. 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 2016
Issued on exercise of options
Transaction costs
At 30 June 2017
Issued on exercise of options
Transaction costs
At 30 June 2018
CONSOLIDATED
2018
$’000
2017
$’000
433,248
431,491
NO. SHARES
(’000s)
$’000
499,854
431,335
1,166
-
175
(19)
501,020
431,491
3,418
-
1,810
(53)
504,438
433,248
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
79
$’000
21,827
-
-
3,222
25,049
-
-
3,231
28,280
$’000
3,243
(2,180)
654
-
1,717
-
-
-
1,717
$’000
3,504
(4,818)
1,424
-
110
(188)
78
-
-
$’000
28,574
(6,998)
2,078
3,222
26,876
(188)
78
3,231
29,997
Balance at 1 July 2016
Net gain on financial instruments recognised in equity
Tax effect of transfers and revaluations
Share-based payment transactions
Balance at 30 June 2017 and 1 July 2017
Net gain on financial instruments recognised in equity
Tax effect of transfers and revaluations
Share-based payment transactions
Balance at 30 June 2018
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.
22. 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 2018 there are no unrecognised temporary differences associated
with the Group’s investment in subsidiaries (2017: $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 // 2018 ANNUAL REPORT Deferred income tax at 30 June relates to the following:
80
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
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
2018
$’000
3,219
4,594
111
-
14,199
28,615
8,873
37,235
96,846
(21,748)
75,098
1,114
13,929
3
-
6,702
21,748
2017
$’000
2,389
469
74
78
10,083
22,529
-
36,973
72,595
(23,192)
49,403
940
14,763
8
31
7,450
23,192
(21,748)
(23,192)
-
-
(49,403)
(25,773)
78
(20,806)
(31,411)
2,814
Closing balance at 30 June – net deferred tax (liabilities)/ assets
(75,098)
(49,403)
KEY JUDGEMENTS
Recovery of deferred tax assets
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.
81
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.
23. 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
2018
$’000
2,575
656
3,231
2017
$’000
2,928
294
3,222
There have been no cancellations or modifications to any of the plans during the current or prior years.
REGIS RESOURCES // 2018 ANNUAL REPORT Employee share option plan (ESOP)
82
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:
2018
NO.
WAEP
2017
NO.
Outstanding at the beginning of the year
9,445,000
$1.5274
13,160,000
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
1,790,000
$3.9000
-
(747,500)
$2.3632
(1,035,000)
(4,665,000)
$1.5294
(2,680,000)
-
-
-
WAEP
$1.7125
-
$1.7570
$2.3473
-
Outstanding at the end of the year
5,822,500
$2.1480
9,445,000
$1.5274
Exercisable at the end of the year
70,000
$1.4000
-
-
Weighted average share price at the date of exercise
Weighted average remaining contractual life
Range of exercise prices
2018
$4.19
2017
$3.85
1.7 years
2.2 years
$1.40 - $3.90
$1.40 - $2.70
Weighted average fair value of options granted during the year
$1.5709
n/a
Option pricing model
The fair value of the equity-settled share options granted under the ESOP is estimated as at the date of grant using
a Black-Scholes option pricing model taking into account the terms and conditions upon which the options were
granted. There were no new grants of employee options during the year ended 30 June 2017. The following table lists
the inputs to the model used for the year ended 30 June 2018:
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Expected life of the option (years)
Option exercise price ($)
Weighted average share price at grant date ($)
2018 ESOP
4.00
73.12 – 93.74
1.74 – 1.90
2 – 3 years
3.90
3.75
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”).
83
Mr Peter Woodman resigned on 29 March 2018, 69,333 performance rights granted to Mr Woodman lapsed upon the
date of the resignation in accordance with the terms and conditions.
The performance conditions that the Board has determined will apply to the Performance Rights are summarised below:
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
The Company’s absolute TSR measured against specific thresholds
Tranche C
25% of the Performance Rights
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)
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
Commencement of measurement period
1 July 2016
1 July 2016
Test date
30 June 2018
30 June 2018
Remaining performance period (years)
nil
nil
The weighted average fair value of the Performance Rights granted during the year was $1.90.
In November 2017, 430,440 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”).
Mr Peter Woodman resigned on 29 March 2018, 71,625 performance rights granted to Mr Woodman lapsed upon the
date of the resignation in accordance with the terms and conditions.
REGIS RESOURCES // 2018 ANNUAL REPORT The performance conditions that the Board has determined will apply to the Performance Rights are summarised below:
84
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)
TRANCHE A & B
TRANCHE C & D
23 November 2017
23 November 2017
$4.090
nil
4.00%
1.90%
50%
3
$4.090
nil
4.00%
1.90%
50%
3
Commencement of measurement period
1 July 2017
1 July 2017
Test date
30 June 2020
30 June 2020
Remaining performance period (years)
2.6
2.6
The weighted average fair value of the Performance Rights granted during the year was $2.98.
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 // NOTES TO THE FINANCIAL STATEMENTS (continued) 24. RELATED PARTIES
Key management personnel compensation
85
The key management personnel compensation included in employee benefits expense (note 3) and share-based
payments (note 23), is as follows:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Termination benefits
Share-based payment
Total compensation
CONSOLIDATED
2018
$
2017
$
3,100,580
2,802,104
157,062
190,062
5,619
159,410
212,867
-
1,391,477
2,030,994
4,844,800
5,205,375
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, other than advised elsewhere in this
report.
Subsidiaries
The consolidated financial statements include the financial statements of Regis Resources Limited and the
subsidiaries listed in the following table:
NAME
Duketon Resources Pty Ltd
Artane Minerals NL
Rosemont Gold Mines Pty Ltd
LFB Resources NL
Greenflow Pty Ltd
Ultimate parent
COUNTRY OF
INCORPORATION
Australia
Australia
Australia
Australia
Australia
% EQUITY INTEREST
INVESTMENT $’000
2018
100%
100%
100%
100%
100%
2017
100%
100%
100%
100%
100%
2018
2017
30,575
30,575
-
-
-
-
44,110
44,110
-
-
74,685
74,685
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 2018, the balance of the loan receivable was $25,971,000 (2017: $24,157,000).
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 2018, the balance of the loan receivable was $63,945,000 (2017:
$38,775,000).
REGIS RESOURCES // 2018 ANNUAL REPORT Transactions with key management personnel
86
For the year ended 30 June 2018, services totalling $645,073 (2017: $335,302) have been provided on normal commercial
terms to the Group by Mintrex Pty Ltd, of which Mrs Morgan is a Managing Director, Chief Executive Officer and
a shareholder. The Company engaged Mintrex during the financial year to engineer preliminary plant designs for
the McPhillamys Project. Mrs Morgan and Mintrex have structured their management of this engineering project
to ensure she has no involvement in the control or direction of the work. The balance outstanding at 30 June was
$30,249, exclusive of GST.
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.
25. PARENT ENTITY INFORMATION
The following details information related to the parent entity, Regis Resources Limited, at 30 June 2018. 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
2018
$’000
252,892
585,459
838,351
66,865
101,674
168,539
433,248
29,997
206,567
669,812
174,396
(110)
174,286
2017
$’000
190,919
518,194
709,113
51,984
85,933
137,917
431,491
26,876
112,829
571,196
138,503
(4,920)
133,583
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 2018 as disclosed at note 27.
All commitments are commitments incurred by the parent entity, except for $744,000 (2017: $1,351,000) of the
exploration expenditure commitments disclosed at note 12, and $201,000 (2017: $35,000) of the operating lease
commitments disclosed at note 26.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) 26. COMMITMENTS
Operating lease commitments – Group as lessee
87
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 in 2016. The Group is under no legal obligation to renew the lease once the extended lease term has
expired.
During the year, two new office leases were entered into for Blayney, NSW, for an initial period of 3 years each,
effective 1 November 2017.
On 1 June 2018, the Group signed a new lease contract for the Perth office for initial period of 3 years. During this
period, the current Perth office lease will be sublet subject to negotiation with the potential lessee.
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
2018
$’000
1,027
1,529
2,556
2017
$’000
373
683
1,056
Finance lease commitments - Group as lessee
The Group has entered into hire purchase contracts for the purchase of two Komatsu loaders. The contracts expire
on 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 2017: 29 May 2018, 27 May 2019 and 4 July 2019).
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
2018
$’000
821
36
857
(15)
842
806
36
842
2017
$’000
1,558
856
2,414
(67)
2,347
1,506
841
2,347
Carrying value of leased assets included in plant and equipment
11
1,132
3,425
REGIS RESOURCES // 2018 ANNUAL REPORT Contractual commitments
88
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.
The agreement has been renewed for further 4 years, effective 1 September 2017. As at 30 June 2018, the Group had
$3,507,000 commitments to purchase electricity (30 June 2017: nil).
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. On 1 September 2017, he agreement was renewed for further 3 years. As at 30 June 2018, at the
current contract price, the Group had commitments to purchase electricity for the remaining term of $11,330,000 (30
June 2017: $762,000).
27. CONTINGENCIES
As at 30 June 2018, the Group did not have any contingent assets or liabilities (30 June 2017: nil).
28. AUDITOR’S REMUNERATION
Audit services
KPMG Australia
Audit and review of financial statements
237,408
217,299
CONSOLIDATED
2018
$
2017
$
Other services
Other advisory services
Taxation compliance services
Total auditor’s remuneration
29. SUBSEQUENT EVENTS
Share issue
13,581
33,700
15,888
6,509
284,689
239,696
Subsequent to year end, 425,133 shares have been issued as a result of the exercise of employee options for proceeds
of $35,000.
Dividends
On 27 August 2018, the directors proposed a final dividend on ordinary shares in respect of the 2018 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.
REGIS RESOURCES // NOTES TO THE FINANCIAL STATEMENTS (continued) 30. 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 2017:
AASB 2016-1 Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for Unrealised
Losses
AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107
The adoption of these new and revised standards did not have a material impact on the Group’s financial statements.
89
New standards and interpretations issued but not yet effective
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 2018 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 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 assessed the effects of applying the new standard and on the recognition of revenue recognised from
gold sales. The Group have concluded that there is no material impact in the amount of revenue recognised from gold
sales following the transition to AASB15. It is not expected that significant changes to disclosures will be required.
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 2022 instead of 1 January 2018.
Application date of Standard:
1 January 2022
Application date for Group: 1 July 2022
REGIS RESOURCES // 2018 ANNUAL REPORT AASB 2016-5 Amendments to Australian Accounting Standards – Classification and Measurement of Share-
based Payment Transactions
90
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:
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 $2.6 million, see note 26. 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 2019, work
on the issues and their resolution will continue including a detailed review of contracts, in particular, the Company’s
mining services and haulage 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 // NOTES TO THE FINANCIAL STATEMENTS (continued) DIRECTORS’ DECLARATION
91
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 2018 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 2018.
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, 27 August 2018
REGIS RESOURCES // 2018 ANNUAL REPORT INDEPENDENT AUDITOR’S REPORT
92
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 2018 and of
its financial performance for the year ended
on that date; and
•
complying with Australian Accounting
Standards and the Corporations Regulations
2001.
Basis for opinion
The Financial Report comprises the:
• Consolidated Balance Sheet as at 30 June 2018
• 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.
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 judgement, 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 // 2018 ANNUAL REPORT
93
Valuation and classification of low grade ore stockpiles
AU $45,986 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 from the continuation of mining
activities; 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:
o comparing forecast processing costs to
previous actual costs, and for consistency
with management’s latest life of mine plan
o comparing forecast quantity of gold
contained within stockpiles to
management’s geological survey results
and historical trends
o 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 // 2018 ANNUAL REPORT
94
Valuation of exploration and evaluation (“E&E”) assets
AU $171,570 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
o
o Minutes of board meetings
o Reports lodged with relevant government
authorities
o Announcements made by the Group to
the ASX
The valuation of E&E assets is a key audit matter
due to:
•
the significance of the E&E balance (being
21% 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.
REGIS RESOURCES // INDEPENDENT AUDITOR’S REPORT (continued)
95
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, we do not
and will 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 the 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_responsibilities/ar1.pdf. This description forms part of our Auditor’s
Report.
REGIS RESOURCES // 2018 ANNUAL REPORT
96
Report on the Remuneration Report
Opinion
In our opinion, the Remuneration Report of Regis
Resources Limited for the year ended 30 June
2018, 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 2018.
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
27 August 2018
REGIS RESOURCES // INDEPENDENT AUDITOR’S REPORT (continued)
ASX ADDITIONAL
INFORMATION
97
As at 19 September 2018 the
following information applied:
1. SECURITIES
(a) Fully Paid Ordinary Shares
The number of holders of fully paid ordinary shares in the Company is 8,080. 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
1-1,000 Shares
Holding between
1,001 - 5,000 Shares
Holding between
5,001 - 10,000 Shares
Holding between
10,001 - 100,000 Shares
Holding more than
100,001 Shares
Holding less than
A marketable parcel
NUMBER OF
SHAREHOLDERS
2,619
3,421
1,039
907
94
8,080
488
NUMBER
OF SHARES
1,240,823
9,259,370
7,914,912
23,791,775
464,921,079
507,127,959
15,493
The Company’s fully paid ordinary shares are quoted on the Australian Securities Exchange using the code RRL.
REGIS RESOURCES // 2018 ANNUAL REPORT The top 20 shareholders are as follows:
98
NAME
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED–GSCO ECA
UBS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
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