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28 009 174 761
D I R E C T O R S
James Mactier
Jim Beyer
Paul Thomas
Ross Kestel
Fiona Morgan
Steve Scudamore
(Independent Non-Executive Chairman)
(Chief Executive Officer and Managing Director)
(Executive Director)
(Independent Non-Executive Director)
(Independent Non-Executive Director)
(Independent Non-Executive Director)
C O M P A N Y S E C R E T A R Y
Jon Latto
R E G I S T E R E D O F F I C E &
P R I N C I P A L P L A C E O F B U S I N E S S
Level 2
516 Hay Street
SUBIACO WA 6008
S H A R E R E G I S T E R
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.
Commonwealth Bank of Australia
Ground Floor, Tower 1
201 Sussex Street
SYDNEY NSW 2000
B A N K E R S
Macquarie Bank Limited
Level 23
240 St Georges Terrace
PERTH WA 6000
A U D I T O R S
KPMG
235 St Georges Terrace
PERTH WA 6000
C O N T E N T S
Chairman's Report
Corporate
Duketon Gold Project
Gold Exploration
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
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4
6
9
18
32
47
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54
94
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100
2
C H A I R M A N ’ S
R E P O R T
Dear Shareholder
The 2019 financial year was one of significant achievement
and change for Regis and I am also pleased to report another
very profitable one.
Net Profit After Tax of $163.1m, despite being slightly down
on last year, was a commendable achievement. Record
revenue from increased gold production and a higher
realised gold price was offset by increased costs primarily
due to increased strip ratios and industry-wide cost
pressures. In addition, a non-cash write-down of some
previously capitalised exploration expenditure was taken.
Our strong profitability, cashflows and outlook, enabled
the Board to declare fully-franked dividends for the year
totalling $81m or $0.16 per share, continuing Regis’
industry-leading performance. This brings total dividends
declared by Regis to $407m and $1,000 invested in Regis
10 years ago with re-investment of dividends, is now worth
over $12,500.
H I G H L I G H T S
Highlights for the year included:
Record gold production and strong financial metrics
generating industry leading dividend returns;
Reserve replacement at Duketon;
Development of our first underground mine at Rosemont; and
Continued encouragement
greenfields exploration effort which
approximately 1,200m below the Rosemont pit;
from our near-mine and
included drilling
In addition, subsequent to year end, we submitted our
Development Application and Environmental
Impact
Statement for the McPhillamy’s Project and acquired
exploration tenure that tripled our landholding in the highly
endowed and prospective Duketon Greenstone Belt.
B O A R D A N D S E N I O R
M A N A G E M E N T C H A N G E S
Jim Beyer was appointed Managing Director and Chief
Executive Officer in October 2018, taking over from
Mark Clark who also stepped down as Chairman and
Director at the AGM in November, at which time I became
Chairman. Non-Executive Director Mark Okeby resigned
in February 2019 and Steve Scudamore was appointed
a Non-Executive Director in May. Subsequent to year
end, Executive Director and Chief Operating Officer, Paul
Thomas resigned and Non-Executive Director Ross Kestel
will also be retiring from the Board at the 2019 AGM. In
addition, Kim Massey resigned as Chief Financial Officer
and Company Secretary at the end of the year, replaced
by Jon Latto.
On behalf of the Board, I would like to thank Mark, Mark,
Paul, Ross and Kim for their very significant contributions
to Regis over the past decade. This period saw the
development and growth of the Duketon operations and
acquisition of the McPhillamy’s Project along with other
value-adding acquisitions and exploration success,
creating extraordinary shareholder value.
Change and renewal is inevitable in any organisation
and should be embraced for the new skills, experience,
ideas, perspectives and opportunities that come with it.
The Board looks forward to continuing working with Jim
and his team and to building on our past successes whilst
maintaining our strong, positive culture and values.
O U T L O O K
Regis continues to invest in growth through significant
exploration expenditure and capital investment as well
as an active but disciplined business development effort.
Whilst the outlook for the Australian dollar gold price is
positive, this may not always be the case and so we remain
disciplined and prudent in our operations, financing and
strategy. Importantly though, we have significant upside
exposure to a rising gold price with over 8 million ounces
of gold in resources, including 4 million ounces in reserves.
We are in a very strong financial position and are committed
to creating value for our people, our communities and our
shareholders through mining safely and responsibly.
Finally, on behalf of the Board, I would like to thank Jim, his
senior management team and all our staff and contractors
for their efforts, diligence and enthusiasm. We look forward
to another safe and successful year.
James Mactier
Non-Executive Chairman
REGIS RESOURCES | 2019 ANNUAL REPORT 3
Regis continues to invest in growth through
significant exploration expenditure and capital
investment as well as an active but disciplined
business development effort.
REGIS RESOURCES | 2019 ANNUAL REPORT 4
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C O R P O R A T E
Regis achieved record gold production of 363,418 ounces for
the 2019 year, with a net profit after tax of $163.1 million.
234
234
253
253
)
(
)
This solid result was due to an 8% increase in gold revenue to $654.8 million driven by a combination of a higher sales
volume and a higher gold price.
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$
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$
181
181
46.6%
46.6%
38.9%
38.9%
46.5%
46.5%
51.7% 46.9%
51.7% 46.9%
Regis sold a total of 369,721 ounces of gold during the year at an average price of A$1,765 per ounce. The Company
delivered the gold produced during the year into a combination of spot deferred contracts and at the prevailing spot price.
I
The following graphs illustrate the strong performance of the Company across several profit metrics.
100
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Revenue
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652
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606
606
502
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465
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544
544
2015
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2016
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2017
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2018
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2019
2019
EBITDA
EBITDA
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EBITDA
EBITDA
2017
2017
2018
2018
2019
2019
EBITDA Margin (%)
EBITDA Margin (%)
200
200
150
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100
100
50
50
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0
Net Profit After Tax
Net Profit After Tax
174
174
163
163
138
138
112
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87
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2015
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2016
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2019
2019
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Earnings & Dividend Per Share
Earnings & Dividend Per Share
40
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34.6
34.6
32.2
32.2
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27.6
22.4
22.4
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EPS
EPS
2017
2017
2018
2018
Dividend Per Share
Dividend Per Share
2019
2019
FY2014 NPAT, EBITDA & EPS adjusted to underlying result by excluding $202.7m after tax impairment charge
Net Profit After Tax
174
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Revenue
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2019
2015
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EBITDA
2017
2018
2019
EBITDA
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181
234
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253
313
307
253
46.5%
51.7% 46.9%
181
38.9%
46.6%
46.5%
51.7% 46.9%
46.6%
38.9%
2015
2016
2017
2018
2019
EBITDA
2015
2016
2017
EBITDA Margin (%)
2019
2018
EBITDA
Net Profit After Tax
EBITDA Margin (%)
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2019
Earnings & Dividend Per Share
Earnings & Dividend Per Share
27.6
27.6
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2015
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2019
EPS
Dividend Per Share
2015
2016
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2018
2019
EPS
Dividend Per Share
REGIS RESOURCES | 2019 ANNUAL REPORT
Net cash from operating activities of $275.4 million was up 6.1% from the previous year. Cash and bullion holdings at the
end of year were $205.3 million, after payment of $96.1 million in payments for mine development, $57.4 million in property,
plant and equipment, $81.2 million in dividends and $34.8 million in exploration expenditure.
Dividends Declared
20
5
Y15
Y16
Y17
Y18
Y19
The Company paid a total of $81.2 million in fully franked dividends during the year and subsequent to the end of the
15
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 operations in FY2019. The full year dividend of 8 cents per
share coupled with the 8 cents per share interim dividend paid in March 2019, took the full year pay out to 16 cents per
10
share. This represents a 12.4% payout of FY2019 revenue and 48% of net profit after tax. Since the commencement of
dividend payments in 2013, the Company has paid a total of $407 million in fully franked dividends (81cps).
8
8
8
9
At year end, the Company had no debt, a net cash and bullion position of $205.3 million and a total hedging position of
0
451,514 ounces of spot deferred contracts with an average delivery price of $1,611 per ounce.
2018
2019
2015
2017
4
7
8
8
2016
Interim
Y16
Y15
Y17
Final
Y18
Y19
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Dividends Declared
Cumulative Dividends Paid
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Interim
2017
2018
2019
Final
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2015
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2013
2014
2015
2016
2017
2018
2019
The following chart details the movement in the Company’s cash reserves over the financial year:
Cumulative Dividends Paid
407
Cash & Bullion on Hand - FY 2019
326
600
245
500
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300
200
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$
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$328.7
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2013
2014
2015
2016
2017
($81.2)
2018
2019
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$
400
300
200
100
$208.8
($96.1)
($34.8)
($57.4)
$205.3
($54.0)
($8.7)
June 2018
O perations
Dividends
D evelop m ent
Mine
Exploration
Other C apex
Inco m e Tax
Other
June 2019
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 | 2019 ANNUAL REPORT
6
D U K E T O N
G O L D P R O J E C T
DUKETON GOLD PROJECT
The Duketon Gold Project is located in the North Eastern
Goldfields of Western Australia approximately 130 kilometres
north of Laverton.
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 South Operations (“DSO”) comprising the Garden Well and Rosemont Gold Mines
and surrounding satellite deposits including the Erlistoun Gold Mine, Tooheys Well Gold Mine and
The project area consists of two operating centres being the Duketon South Operations (“DSO”) comprising the Garden
Baneygo Gold Mine; and the Duketon North Operations (“DNO”) comprising the Moolart Well Gold
Well and Rosemont Gold Mines and surrounding satellite deposits including the Erlistoun Gold Mine, Tooheys Well Gold
Mine and surrounding satellite deposits including the Gloster Gold Mine, Anchor Gold Mine, Dogbolter
Mine and Baneygo Gold Mine; and the Duketon North Operations (“DNO”) comprising the Moolart Well Gold Mine and
Gold Mine and the Petra Gold Mine. The Duketon Project has in excess of 1,000 square kilometres
surrounding satellite deposits including the Gloster Gold Mine, Anchor Gold Mine, Dogbolter Gold Mine and the Petra Gold
of exploration and mining tenure.
Mine. The Duketon Project has in excess of 1,000 square kilometres of exploration and mining tenure.
Subsequent to the end of the year, the Company acquired 35 tenements for $20 million in cash and up to $5 million
Subsequent to the end of the year, the Company acquired 35 tenements for $20 million in cash
in contingent payments from Duketon Mining Limited. The tenement package will increase Regis’ landholding in the
from Duketon Mining Limited. The tenement package will increase Regis’ landholding in the
Duketon Greenstone Belt ("DGB") by approximately 2,000 square kilometres. The tenements acquired lie along strike and
adjacent to Regis’ current landholding and include multiple advanced gold exploration prospects including McKenzie
Well, Golden Star, and the Lancefield North project that is host to a JORC 2012 resource of 1.9 million tonnes @ 1.5 g/t
gold for 96,000 ounces.
4
REGIS RESOURCES | 2019 ANNUAL REPORT
7
Prior to this land acquisition Regis controlled 32% of the DGB and were successful explorers discovering over 6 million
ounces of gold. Regis now controls 90% of the DGB and with its expertise and funding to expedite exploration across
highly prospective areas, is well positioned to realise the total undiscovered mineralisation potential of the belt.
The Duketon Project produced record gold production for 2019, with 363,418 ounces of gold produced which was at the
upper end of FY2019 guidance of 340,000-370,000 ounces. Mining volumes increased from the prior year by 31% for the
project with the commencement of operations at the Tooheys Well and Anchor satellite pits. Milled grade increased by 7%
to 1.27g/t with the higher grade ore feed from the Erlistoun and Tooheys Well satellite pits. All in sustaining costs increased
by 14% to $1,029 due principally to the higher strip ratios across the project.
Operating results for the entire Duketon Project are summarised below:
Ore mined
Waste mined
Stripping ratio
Ore mined
Ore milled
Head grade
Recovery
Gold production
Cash cost
Cash cost inc royalty
All in Sustaining Cost
Mbcm
Mbcm
w:o
Mt
Mt
g/t
%
koz’s
A$/oz
A$/oz
A$/oz
2019
4.28
28.12
6.58
10.14
9.43
1.27
94
363
819
897
1,029
2018
4.58
20.13
4.40
10.55
10.04
1.19
94
361
721
794
901
D U K E T O N S O U T H O P E R A T I O N S
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 2019 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$/oz
2019
2.72
21.30
7.8
6.98
6.45
1.40
94
275
791
870
1,021
2018
2.86
15.06
5.3
7.40
6.79
1.24
94
254
751
826
932
REGIS RESOURCES | 2019 ANNUAL REPORT
8
Annual production at DSO was 274,861 ounces of gold for the year, which was an increase of 8% on the prior year. Gold
production increased due to higher grade and mill recovery from the Erlistoun and Tooheys Well satellite deposits. Head
grade was 1.40g/t, an increase of 13% from the prior year.
D U K E T O N N O R T H O P E R A T I O N S
Duketon North Operations (‘DNO’) comprises the Moolart Well, Gloster, Dogbolter, Petra and Anchor pits with all ore
processed through the Moolart Well processing plant.
Operating results for the year to 30 June 2019 were as follows:
Ore mined
Waste mined
Stripping ratio
Ore mined
Ore milled
Head grade
Recovery
Gold production
Cash cost
Cash cost inc royalty
All in Sustaining Cost
Mbcm
Mbcm
w:o
Mt
Mt
g/t
%
koz’s
A$/oz
A$/oz
A$/oz
2019
1.55
6.82
4.4
3.16
2.98
0.99
93
88
903
981
1,055
2018
1.72
5.07
2.9
3.15
3.26
1.09
94
107
649
718
827
DNO produced 88,558 ounces at a cash cost of $903 per ounce and an all in sustaining cost of $1,055 per ounce.
Production at DNO was down by 17% from the previous year as a result of decreases in processed head grade, recovery
and throughput. During the year, mining at the Gloster deposit transitioned into the harder fresh rock zone of the deposit.
As a result, mill throughput decreased by 8% from the prior year.
REGIS RESOURCES | 2019 ANNUAL REPORT 9
G O L D
E X P L O R A T I O N
Regis controls a significant tenement package across the
majority of the Duketon Greenstone Belt. The tenement
holding encompasses 194 granted exploration, prospecting
and mining leases
D U K E T O N G O L D P R O J E C T
Regis controls a significant tenement package across the majority of the Duketon Greenstone Belt. The tenement holding
encompasses 194 granted exploration, prospecting and mining leases, across 991 square kilometres and 4 exploration
licence applications over 227 square kilometres.
Regis’ exploration effort in recent years has been successful in extending the reserve base of the Company and replacing
annual production. Successful replenishment and extension of Reserves is due to the significant tenure position on
prospective geology and the proximity to the 10Mtpa milling capacity provided at Duketon.
CONSISTENTLY REPLACING RESERVES
4.06
4.03
McPhillamys Deposit
2.00
2.13
2.18
2.03
2.01
1.75 Moz
)
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4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
2015
2016
2017
2018
2019
Reserves
Production
Cumulative Production
Significant exploration and development projects advanced during the year ended 30 June 2019 are outlined below.
Development – Rosemont Underground Project
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 paralleled, en-echelon and stacked vein structures. The quartz-dolerite varies
from 5 metres, up to 100 metres wide.
REGIS RESOURCES | 2019 ANNUAL REPORT
paralleled, en-echelon and stacked vein structures. The quartz-dolerite varies from 5 metres, up
to 100 metres wide.
10
In August 2018, the Company announced that it had approved the development of an
underground mining operation at the current Rosemont open pit based on a detailed mining
In August 2018, the Company announced that it had approved the development of an underground mining operation at
the current Rosemont open pit based on a detailed mining study, which assessed the mining of the maiden underground
study, which assessed the mining of the maiden underground resource at Rosemont of 1.4
resource at Rosemont of 1.4 million tonnes at 5.1g/t of gold for 230,000 ounces.
million tonnes at 5.1g/t of gold for 230,000 ounces.
An updated Mineral Resource estimate of 1.7 million tonnes at a grade of 5.6g/t for 314,000 ounces of gold was announced
An updated Mineral Resource estimate of 1.7 million tonnes at a grade of 5.6g/t for 314,000
in April 2019. The increase in total resources is the result of further extensional and infill RC and diamond drilling completed
subsequent to the original resource estimate. The updated Mineral Resource estimate was used as the basis for a Pre-
ounces of gold was announced in April 2019. The increase in total resources is the result of
Feasibility Study (‘PFS’), which highlights three separate zones to be extracted, being Rosemont South, Rosemont Central
further extensional and infill RC and diamond drilling completed subsequent to the original
and Rosemont Main.
resource estimate. The updated Mineral Resource estimate was used as the basis for a Pre-
Development of the portal at the southern end of the Rosemont Main open pit began in February 2019, with first ore mined
Feasibility Study (‘PFS’), which highlights three separate zones to be extracted, being
in the September 2019 quarter.
Rosemont South, Rosemont Central and Rosemont Main.
Rosemont Long Section looking west with high grade intercepts beneath the final pit and planned
Rosemont long section looking west with high grade intercepts beneath the final pit and planned underground development
underground development
Garden Well Underground
Development of the portal at the southern end of the Rosemont Main open pit began in
Garden Well is a shear hosted Archaean orogenic gold deposit located 100 kilometres north of Laverton which commenced
February 2019, with first ore expected to be mined in the September 2019 quarter.
operations in September 2012 and currently has a 6-year mine life. Drilling below the final pit design at the Garden Well
Gold mine indicated the potential for a significant underground target below the southern end of the open pit project.
Numerous thick, high-grade intercepts sit below and to the south of the pit design in a zone of continuous mineralisation.
RC and diamond drilling programmes were undertaken with the aim to test the down plunge continuity of high-grade gold
mineralisation located below the final pit design and to reduce the drill spacing.
Drilling during the year has identified a high-grade gold shoot measuring 4-10 metres true width across strike and 80-
100 metres in height, plunging moderately to the south, extending from the southern end of the open pit. The zones of
mineralisation sit between 100-400 metres below surface, dip to the east and are open at depth to the south.
8
In addition, multiple high-grade shoots have also been identified along strike further north, below the current pit design.
Results continue to show significant widths and grades of gold mineralisation, demonstrating the potential for a maiden
underground resource. A preliminary evaluation of the underground potential is underway and results are expected to be
available in FY2020.
REGIS RESOURCES | 2019 ANNUAL REPORT
Garden Well Underground
Garden Well is a shear hosted Archaean orogenic gold deposit located 100 kilometres north of
Laverton which commenced operations in September 2012 and currently has a 7-year mine life.
Drilling below the final pit design at the Garden Well Gold mine indicated the potential for a
significant underground target below the southern end of the open pit project. Numerous thick,
high-grade intercepts sit below and to the south of the pit design in a zone of continuous
RC and diamond drilling programmes were undertaken with the aim to test the down plunge
continuity of high-grade gold mineralisation located below the final pit design and to reduce the
mineralisation.
drill spacing.
Drilling during the year has identified a high-grade gold shoot measuring 4-10 metres true width
across strike and 80-100 metres, plunging moderately to the south, extending from the southern
end of the open pit. The zones of mineralisation sit between 100-400 metres below surface, dip
to the east and are open at depth to the south.
In addition, multiple high-grade shoots have also been identified along strike further north, below
the current pit design. Results continue to show significant widths and grades of gold
mineralisation, demonstrating the potential for a maiden underground resource. A preliminary
evaluation of the underground potential is underway and results is expected to be available in
FY2020.
11
Baneygo Underground
The Baneygo-Idaho Gold Project is located 15 kilometres south along strike of the Rosemont
Garden Well long section looking west with high grade intercepts beneath the south end of the current pit design
Garden Well long section looking west with high grade intercepts beneath the south end of the current pit design
Gold Deposit and has a Mineral Resource of 11.4 million tonnes at 0.99g/t for 363,000 ounces of
Baneygo Underground
gold. Gold mineralisation at Baneygo extends over five strike kilometres and is hosted in quartz
dolerite which has intruded a sequence of mafic-ultramafic-sedimentary units. The deposits are
The Baneygo-Idaho Gold Project is located 15 kilometres south along strike of the Rosemont Gold Deposit and has a Mineral
similar in style to the Rosemont Gold deposit, with gold mineralisation confined to the quartz
Resource of 11.4 million tonnes at 0.99g/t for 363,000 ounces of gold. Gold mineralisation at Baneygo extends over five
dolerite.
strike kilometres and is hosted in quartz dolerite which has intruded a sequence of mafic-ultramafic-sedimentary units. The
deposits are similar in style to the Rosemont Gold deposit, with gold mineralisation confined to the quartz dolerite.
A drill programme during the year targeted multiple high grade gold shoots in fresh rock across a
two kilometre strike beneath the pit designs. Four high-grade gold shoots have been identified
A drill programme during the year targeted multiple high-grade gold shoots in fresh rock across a two kilometre strike
beneath the pits and are open down plunge.
beneath the pit designs. Four high-grade gold shoots have been identified beneath the pits and are open down plunge.
9
Long section looking west. Baneygo Central with significant intercepts beneath pit designs
Long section looking west. Baneygo Central with significant intercepts beneath pit designs
10
REGIS RESOURCES | 2019 ANNUAL REPORT
12
Long section looking west. Baneygo North with significant intercepts beneath pit designs
Long section looking west. Baneygo North with significant intercepts beneath pit designs
Drilling beneath the final pit designs will continue in FY2020 in order to further assess the grade and thickness of multiple
Drilling beneath the final pit designs will continue in FY2020 in order to further assess the grade
high grade shoots and their suitability for underground development.
and thickness of multiple high grade shoots and their suitability for underground development.
Group Reserve & Reserve Growth
Group Reserve & Reserve Growth
The 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. In addition, drilling for
underground resource potential continues to produce highly encouraging results at Garden Well, Baneygo and other earlier
stage targets.
The 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
The Company successfully added to the Group resource and reserve base when it released the annual Mineral Resource
life of the current operations. In addition, drilling for underground resource potential continues to
and Ore Reserve Statement in July 2019. The re-estimation of the Group Ore Reserves resulted in a 4% increase in tonnes
and 8% increase in ounces after allowing for depletion by mining.
produce highly encouraging results at Garden Well, Baneygo and other earlier stage targets.
Group Mineral Resources compliant with JORC Code 2012 as at 31 March 2019 are estimated to be 263.3 million tonnes
The Company successfully added to the Group resource and reserve base when it released the
at 0.97g/t gold for 8.19 million ounces of gold, compared with the estimate at 31 March 2018 of 254.5 million tonnes at
annual Mineral Resource and Ore Reserve Statement in July 2019. The re-estimation of the
0.96g/t Au for 7.86 million ounces of gold. The change in the Group Mineral Resources is primarily due to the addition of
the Discovery Ridge deposit.
Group Ore Reserves resulted in a 4% increase in tonnes and 8% increase in ounces after allowing
for depletion by mining.
The JORC compliant Group Mineral Resources as at 31 March 2019 are estimated to be 263.3 million
tonnes at 0.97g/t gold for 8.19 million ounces of gold, compared with the estimate at 31 March 2018
of 254.5 million tonnes at 0.96g/t Au for 7.86 million ounces of gold. The change in the Group Mineral
Resources is primarily due to the addition of the Discovery Ridge deposit.
11
REGIS RESOURCES | 2019 ANNUAL REPORT
GROUP MINERAL RESOURCE
7.86
0.36
0.26
0.43
8.19
13
s
e
c
n
u
O
n
o
i
l
l
i
M
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0
31 March 2018
Depletion
Model Update
New Deposits
31 March 2019
Mineral Resources are reported inclusive of Ore Reserves and include all exploration and resource definition drilling
information, where practicable, up to 31 March 2019 and have been depleted for mining to 31 March 2019.
Mineral Resources are constrained by optimised open pit shells developed with operating costs and a long term gold price
assumption of A$2,000 per ounce for the purpose of satisfying “reasonable prospects for eventual extraction” (JORC 2012).
The change in the Group Ore Reserve from March 2018 to March 2019 is as follows:
GROUP ORE RESERVE
4.06
0.36
0.09
0.24
4.03
s
e
c
n
u
O
n
o
i
l
l
i
M
5.0
4.0
3.0
2.0
1.0
0
31 March 2018
Depletion
Model Update
New Deposits
31 March 2019
The major contributors to the increase in Ore Reserves net of depletion were:
The inclusion of the maiden Ore Reserve from Rosemont Underground;
The inclusion of further drilling results; and
A review of current pit design parameters including costs and the metallurgical and geotechnical performance of mining
projects to date.
REGIS RESOURCES | 2019 ANNUAL REPORT
McPhillamys Gold Project
14
The 100% Regis owned McPhillamys Gold Project, located in New South Wales, is one of
Australia’s larger undeveloped open pittable gold resources. The project is located 250 kilometres
M C P H I L L A M Y S G O L D P R O J E C T
west of Sydney in a well established mining district. In July 2019, the Company announced an
The 100% Regis owned McPhillamys Gold Project, located in New South Wales, is one of Australia’s larger undeveloped
open pittable gold resources. The project is located 250 kilometres west of Sydney in a well established mining district. In
updated Ore Reserve of 60.8 million tonnes at 1.04g/t gold for 2.02 million ounces.
July 2019, the Company announced an updated Ore Reserve of 60.8 million tonnes at 1.04g/t gold for 2.02 million ounces.
McPhillamys Gold Project location and NSW tenure
McPhillamys Gold Project location and NSW tenure
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:
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.
MINING
Waste volume (BCM millions)
Key life of mine physical results from the study are summarised below:
Ore volume (BCM millions)
Volume total (BCM millions)
W:O Strip Ratio
MILLING
Dry Tonnes Per Hour
Plant Availability
Ore Milled (Tonnes millions)
Milled Grade (g/t)
Recovery
Ounces Recovered
Mine life (years)
91.6
21.3
112.9
4.29
841
95.0%
60.1
1.05
85.0%
1,728,264
9
14
REGIS RESOURCES | 2019 ANNUAL REPORT
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
15
u
A
t
/
g
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
1
2
3
4
5
6
7
8
9
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
Ounces
Recovered
Milled Grade
(g/t)
During the year, the Company continued to progress and refine the pipeline route access to utilise recycled water from the
Mt Piper Power Station and Centennial Mine near Lithgow. This is one of the two long term water supply options for the
Project. The Company continues to hold approximately 4.5GL/pa of ground water access licenses in a zone of the Lachlan
catchment, approximately 80 kilometres from the McPhillamys Project as an alternative water supply.
Subsequent to the end of the year, the Company submitted the McPhillamys Development Application (‘DA’) along with
the Environmental Impact Statement (‘EIS’) for appraisal and assessment by the Department of Planning, Industry and
Environment, New South Wales.
The Definitive Feasibility Study (‘DFS’) is progressing and will be completed subsequent to the submission of the EIS as it
needs to incorporate any additional requirements for Project development emanating from the DA process. The DFS will
further define the operating parameters, estimated capital and operating costs and a development timeline.
REGIS RESOURCES | 2019 ANNUAL REPORT
16
Group Mineral Resources
As at 31 March 2019
GOLD
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)
COM-
PETENT
PERSON2
0.80
167
21.2
0.68
461
PROJECT
Moolart Well1
Gloster1
Dogbolter1
Petra
Anchor1
TYPE
Open-Pit
Open-Pit
Open-Pit
Open-Pit
Open-Pit
Duketon North Deposits
Sub Total
Garden Well1
Rosemont1
Rosemont3
Tooheys Well1
Baneygo
Erlistoun1
Russells Find
Reichelts Find
King John
Beamish
Open-Pit
Open-Pit
Underground
Open-Pit
Open-Pit
Open-Pit
Open-Pit
Open-Pit
Open-Pit
Open-Pit
0.4
0.4
0.4
0.4
0.4
0.4
0.4
2.0
0.4
0.4
0.4
0.4
0.4
0.4
0.4
6.5
0.5
0.1
-
0.0
7.1
6.6
2.6
-
0.85
0.92
-
1.16
0.80
0.72
1.21
-
0.1
1.25
-
-
0.1
1.19
-
-
-
-
-
-
-
-
13
2
-
1
183
153
101
-
6
-
4
-
-
-
-
9.6
4.9
1.5
0.2
37.4
52.6
9.9
0.9
15.3
10.7
4.2
2.4
0.6
-
0.78
240
1.00
171
1.05
1.50
52
9
0.78
934
0.88
1,484
1.14
363
5.52
169
1.13
558
0.99
342
1.22
165
1.04
2.18
-
81
43
-
41
1.8
0.70
Duketon South Deposits
Sub Total
9.4
0.87
263
98.6
1.02
3,245
Duketon Total
McPhillamys
Discovery Ridge
Total
Open-Pit
Open-Pit
0.4
0.4
NSW Deposits
Sub Total
16.6
0.84
447
136.0
0.96
4,180
-
-
-
-
-
-
-
-
-
69.1
1.03
2,278
8.1
1.26
331
77.2
1.05
2,609
5.6
6.0
0.2
0.8
0.0
12.6
13.2
0.1
0.8
1.2
0.7
0.6
0.2
0.3
0.8
-
17.9
30.5
0.7
2.3
3.0
0.71
128
0.67
1.11
0.65
0.65
0.69
0.72
129
6
17
0
280
307
1.21 4.87
33.3
16.1
5.1
2.4
0.2
57.1
72.5
12.6
0.71
756
0.74
382
1.08
179
0.91
1.44
69
11
0.76
1,398
0.83
1,944
1.19
469
5.66
145
1.7
5.59
314
0.89
34
0.94
21
0.99
18
0.87
5
2.26
21
1.56
42
-
-
16.6
11.4
4.9
2.6
0.9
0.8
1.8
1.12
598
0.99
363
1.19
187
1.03
2.21
1.56
0.70
86
64
42
41
1.04
0.90
0.63
599
125.9
1.01
4,108
879
183.1
0.94
5,506
15
0.82
60
69.8
10.4
1.02
2,293
1.17
391
0.78
75
80.2
1.04
2,683
A
A
A
A
A
A
A
B
A
A
A
A
A
A
A
A
A
Regis
Grand Total
16.6
0.84
447
213.2
0.99
6,788
33.5
0.89
954
263.3
0.97
8,189
The above data has been rounded to the nearest 100,000 tonnes, 0.01 g/t gold grade and 1,000 ounces. Errors of
summation may occur due to rounding. All Mineral Resources are reported inclusive of Ore Reserves to JORC Code 2012
unless otherwise noted.
1. Mineral Resources and Ore Reserves are reported inclusive of ROM Stockpiles at cut-off grade of 0.4 g/t.
2. Refer to Group Competent Person Notes.
3. As reported 15 April 2019.
Group Ore Reserves
As at 31 March 2019
PROVED
PROBABLE
TOTAL ORE RESERVE
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
TYPE
GOLD
PROJECT
Moolart Well1
Dogbolter1
Gloster1
Petra
Anchor1
Open-Pit
> 0.3
Open-Pit
> 0.35
Open-Pit
Open-Pit
> 0.4
> 0.4
Open-Pit
> 0.35
Duketon North Deposits
Sub Total
Garden Well1
Rosemont1
Rosemont4
Tooheys Well1
Baneygo
Erlistoun1
Russells Find
Open-Pit
> 0.3
Open-Pit
> 0.35
Underground
2.0
Open-Pit
> 0.45
Open-Pit
> 0.45
Open-Pit
> 0.35
Open-Pit
> 0.4
Duketon South Deposits
Sub Total
Duketon Total
McPhillamys4
Sub Total
Open-Pit
> 0.4
10.4
-
2.2
0.1
0.5
-
0.0
2.8
5.5
1.8
-
0.1
-
0.1
-
7.6
0.88
0.92
0.85
-
-
0.88
0.73
1.34
-
-
-
1.19
-
0.89
0.89
-
63
2
13
-
1
79
130
79
-
6
-
4
-
219
298
-
3.3
3.4
3.0
1.0
0.1
10.9
12.9
4.0
0.6
6.5
3.4
2.8
0.7
30.9
41.7
60.8
0.78
1.12
1.09
1.11
1.76
1.01
1.05
1.47
6.44
1.55
1.30
1.31
1.33
1.37
1.28
1.04
83
124
106
34
6
354
434
190
123
322
142
118
30
1,359
1,713
2,023
5.5
3.5
3.5
1.0
0.1
13.7
18.4
5.9
0.6
6.6
3.4
2.9
0.7
38.5
52.2
60.8
0.82
1.12
1.06
1.11
1.62
0.99
0.95
1.43
6.44
1.54
1.30
1.31
1.33
1.27
1.20
1.04
146
126
119
34
8
433
564
269
123
328
142
122
30
1,578
2,011
2,023
C
C
C
C
C
C
C
D
C
C
C
C
C
Regis
Grand Total
10.4
0.89
298
102.5
1.13
3,736
112.9
1.11
4,034
The above data has been rounded to the nearest 100,000 tonnes, 0.01 g/t gold grade and 1,000 ounces. Errors of
summation may occur due to rounding.
1. Mineral Resources and Ore Reserves are reported inclusive of ROM Stockpiles at cut-off grade of 0.4 g/t.
2. Cut-off grades vary according to oxidation and lithology domains. Refer to Group Ore Reserves Lower Cut Notes.
3. Refer to Group Competent Person Notes.
4. As reported 15 April 2019.
REGIS RESOURCES | 2019 ANNUAL REPORT
17
18
D I R E C T O R S '
R E P O R T
19
D I R E C T O R S '
R E P O R T
Your directors submit their report for the
year ended 30 June 2019.
D I R E C T O R S
The directors of the Company in office since 1 July 2018 and up to the date of
this report are:
Mr James Mactier, BAgrEc(Hons), GradDipAppFin, GAICD
(Independent Non-Executive Chairman from 23 November 2018,
previously 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 companies.
Mr Jim Beyer, BEng, MGeoSc, AMEC
(Chief Executive Officer and Managing Director - appointed
15 October 2018)
Mr Beyer is a qualified Mining Engineer with extensive gold industry experience
having been the General Manager of the Boddington Gold Mine, one of
Australia’s largest gold mines, from 2007 to 2010 and General Manager of the
Pajingo Gold Mine from 2004 to 2006.
Prior to Regis, Mr Beyer was the Chief Executive Officer of Western Australian
based iron ore producer and explorer Mt Gibson Iron Limited (ASX:MGX) from
2012 to 2018.
Mr Beyer holds a Bachelor of Engineering (Mining) degree, a Masters of
Geoscience (Mineral Economics) and is a Vice President of the Executive
Council of the Association of Mining & Exploration Companies (AMEC).
During the past three years, Mr Beyer has not served as a director of any other
ASX listed companies.
REGIS RESOURCES | 2019 ANNUAL REPORT 20
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 Ross Kestel, B.Bus, CA, MAICD
(Independent Non-Executive Director)
Mr Kestel is a Chartered Accountant and was a director of a mid-tier accounting
practice for over 27 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.
Mrs Fiona Morgan, CPEng, BE(Hons), FIEAust, FAusIMM, GAICD
(Independent Non-Executive Director)
Mrs Morgan is a Chartered Professional Engineer with over 25 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 Australia, 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 companies.
REGIS RESOURCES | DIRECTORS' REPORT (continued) 21
Mr Steve Scudamore, MA (Oxon), FCA, FAICD, SF Fin
(Independent Non-Executive Director – appointed 13 May 2019)
Mr Scudamore is a respected Chartered Accountant with significant ASX listed
Board experience. He was a partner with KPMG for 28 years until his retirement
in 2012, specialising in energy and natural resources. He held senior roles in
Australia, UK and PNG including National Managing Partner for Valuations,
Head of Corporate Finance WA and Chairman of Partners WA.
Mr Scudamore holds a Masters of Arts (History and Economics) from Oxford
University, is a Fellow of the Institutes of Chartered Accountants Australia and
England and Wales, is a Fellow of the Institute of Company Directors and a
Senior Fellow of the Financial Services Institute of Australia.
Mr Scudamore is currently a non-executive director of ASX listed companies
Pilbara Minerals Limited and Australis Oil and Gas Limited as well as various not-
for-profit and community organisations. His previous board positions include
Aquila Resources Limited and Altona Mining Limited.
Mr Mark Clark, B.Bus CA
(Executive Chairman – retired 23 November 2018)
Mr Clark has over 28 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.
Mr Clark stepped down as Managing Director and Executive Chairman on
15 October 2018 and assumed the role of Non-Executive Chairman until his
retirement after the Company’s AGM on 23 November 2018.
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 Mark Okeby, LLM
(Non-Executive Deputy Chairman – retired 20 February 2019)
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 retired as non-executive director on 20 February 2019.
At the date of his retirement Mr Okeby was also 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 | 2019 ANNUAL REPORT 22
C O M P A N Y S E C R E T A R Y
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.
Mr Massey resigned as Company Secretary on 24 June 2019.
Mr Jon Latto, B.Com, CA, MBA GradDip ACG ACIS
Mr Latto is an internationally experienced Chartered Accountant with 25 years’ experience including over 10 years’
experience as a Chief Financial Officer within the Australian gold sector.
Mr Latto was appointed as Company Secretary effective 24 June 2019.
D I V I D E N D S
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
40,650
The financial effect of these dividends has not been brought to account in the consolidated financial statements for the year
ended 30 June 2019 and will be recognised in subsequent financial reports.
N A T U R E O F O P E R A T I O N S A N D P R I N C I P A L A C T I V I T I E S
The principal activities of Regis Resources Limited (“Regis” or the “Company”) and its controlled entities (collectively, the
“Group”) during the year were:
Production of gold from the Duketon Gold Project;
Exploration, evaluation and development of gold projects in the Eastern Goldfields of Western Australia; and
Exploration and evaluation of the McPhillamys Gold Project in New South Wales.
Apart from the above, or as noted elsewhere in this report, no significant changes in the state of affairs of the Company
occurred during the financial year.
O B J E C T I V E S
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 dividends; and
Actively pursue inorganic growth opportunities.
REGIS RESOURCES | DIRECTORS' REPORT (continued) 23
O P E R A T I N G A N D F I N A N C I A L R E V I E W
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 South
Operations (DSO) contains the Garden Well Gold Mine, the Rosemont Gold Mine, the Erlistoun Gold Mine and the Tooheys
Well Gold Mine. The Duketon North Operations (DNO) comprises the Moolart Well Gold Mine, the Gloster Gold Mine, the
Anchor Gold Mine and the Dogbolter 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 Blayney.
Financial Summary
KEY FINANCIAL DATA
Financial results
Sales revenue
2019
$’000
2018
$’000
CHANGE
$’000
CHANGE
%
652,450
604,425
48,025
Cost of sales (excluding D&A)(i)
(328,068)
(279,273)
(48,795)
Other income
4,379
3,396
983
Corporate, admin and other costs
(21,976)
(15,987)
(5,989)
EBITDA(i)
306,785
312,561
Depreciation and amortisation (D&A)
(74,223)
(64,437)
(5,776)
(9,786)
Profit before tax(i)
Income tax expense
233,473
248,921
(15,448)
(70,323)
(74,690)
4,367
Reported profit after tax
163,150
174,231
(11,081)
Other financial information
Cash flow from operating activities
275,485
259,727
186,576
180,276
716,464
636,842
79,622
15,757
6,300
Net cash
Net assets
7.9%
17.5%
28.9%
37.5%
(1.8%)
15.2%
(6.2%)
5.8%
(6.4%)
6.1%
3.5%
12.5%
(7.0%)
Basic earnings per share (cents per share)
32.18
34.60
(2.47)
(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 an after tax profit of $163.1 million for the full year to 30 June 2019, which was down 6.4% from the previous
corresponding year result of $174.2 million.
Sales
The Company produced 363,418 ounces of gold for the year ended 30 June 2019. Gold sales revenue rose by 7.9% from
the previous year with 369,721 ounces of gold sold at an average price of $1,765 per ounce in 2019 (2018: 359,750 ounces
at $1,680 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 451,514 ounces with a weighted average forward price of $1,611 per
ounce comprising of 25,000 ounces at spot trade with a delivery price of $1,830 per ounce and 426,514 ounces of forward
contracts with an average delivery price of $1,598 per ounce (2018: 388,711 ounces of forward contracts with a weighted
average forward price of $1,555 per ounce).
REGIS RESOURCES | 2019 ANNUAL REPORT 24
Cost of Sales
Costs of sales including royalties, but before depreciation and amortisation increased by 17.5% to $328.1 million.
Depreciation and Amortisation
Depreciation and amortisation charges increased by 15.2% 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 $275.5 million, up 6.1% on the prior year due to increased production. During the
year, the Company paid $53.9 million of income taxes.
The Company continued to provide strong returns to shareholders through the payment of two fully franked dividends in
2019 totalling $81.2 million.
Duketon South Operations (“DSO”)
Operating results at the Duketon South Operations for the 12 months to 30 June 2019 were as follows:
Ore mined
Waste mined
Strip ratio
Ore mined
Ore milled
Head grade
Recovery
Gold production
Cash cost per ounce – pre royalties
Cash cost per ounce – incl. royalties
All-in Sustaining Cost (“AISC”)
30 JUNE 2019
30 JUNE 2018
BCM
2,720,208
2,857,329
BCM 21,304,421
15,060,386
w:o
Tonnes
Tonnes
g/t
%
7.8
5.3
6,980,062
7,400,488
6,451,299
6,783,488
1.40
94
1.24
94
Ounces
274,861
254,445
A$/oz
A$/oz
A$/oz
$791
$870
$1,020
$751
$826
$932
Production at DSO increased by 8% from the previous year with 274,861 ounces of gold produced at an all-in sustaining
cost of $1,020 per ounce. Production is higher due to an increase in processed head grade and mill recovery as a result of
ore feed from the Erlistoun satellite pit and the Tooheys Well satellite pit, which commenced operations in October 2018.
AISC increased by 10% primarily due to the higher strip ratio across the Duketon South pits and the construction of an
additional tailings storage facility near Tooheys Well.
Duketon North Operations (“DNO”)
Operating results for the 12 months to 30 June 2019 were as follows:
Ore mined
Waste mined
Strip ratio
Ore mined
Ore milled
Head grade
Recovery
Gold production
Cash cost per ounce – pre royalties
Cash cost per ounce – incl. royalties
All-in Sustaining Cost (“AISC”)
25
30 JUNE 2019
30 JUNE 2018
1,555,629
1,721,414
6,816,483
5,074,235
4.4
2.9
3,161,815
3,154,597
2,982,702
3,255,901
0.99
93
1.09
94
BCM
BCM
w:o
Tonnes
Tonnes
g/t
%
Ounces
88,558
106,928
A$/oz
A$/oz
A$/oz
$903
$981
$1,055
$649
$718
$827
DNO produced 88,558 ounces of gold for the year at an all-in sustaining cost of $1,055 per ounce. Gold production was
down 17% on the prior year as a result of decreases in processed head grade, throughput and recovery at the Moolart
Well mill. Throughput was affected by the transition of mining at the Gloster open pit into the harder fresh rock zone of the
deposit.
AISC increased by 28% on the prior year due to increased stripping ratios and mining volumes at DNO, as the mining fleet
focussed on pre-production activities at the Dogbolter satellite pit. In addition, the cost of purchasing additional crushing
capacity at Gloster and lower gold production contributed to the higher all-in sustaining cost for the year.
26
Exploration
During the year, a total of 234,157 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
Moolart Well
29,559
26,520
2,861 58,940
Swanson North
3,074
Rosemont
Baneygo
Garden Well
-
-
-
31,609
4,292 35,901
Ventnor
28,117
-
28,117
Millar Hill
10,303
8,961 19,264
White Well
Pleco
6,705
5,626
12,331
Little Well
2,967
2,951
2,476
2,470
-
-
-
-
-
Steer Creek
9,312
Petra
7,104
Moolart North
5,640
Borodale Creek
5,432
Winnebago
Ingijingi
Gloster
Discovery
Ridge
Idaho
Beamish
McKenzie
4,551
4,374
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,312
Tooheys Well
7,104
Russell’s Find
-
-
2,184
1,942
5,640
Murphy Hills
1,663
5,432
Camp Oven
1,465
-
-
4,551
Crown
-
1,445
4,374
2,827
1,122
3,949
-
3,880
3,880
O’Connor
Reward
Mitchell
Golden Pig
3,723
King John
3,723
3,595
3,144
-
-
-
882
-
-
-
-
660
648
73
Total
90,625
122,416
21,116 234,157
3,595
3,144
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,074
2,967
2,951
2,476
2,470
2,184
1,942
1,663
1,465
1,445
882
660
648
73
Significant projects advanced during the year ended 30 June 2019 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.
Development - Rosemont Underground Project
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 Carbon in Leach (‘CIL’) plant. 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 August 2018, the Company announced that it had approved the development of an underground mining operation at
the current Rosemont open pit operation, based on a detailed mining study, which assessed the mining of the maiden
underground resource at Rosemont of 1.4 million tonnes at 5.1g/t Au for 230,000 ounces.
Further extensional and infill reverse circulation (‘RC’) and diamond drilling was completed during the year which has
resulted in an updated Mineral Resource estimate of 1.7 million tonnes at 5.6g/t Au for 314,000 ounces.
The underground mining contract was awarded to Barminco for an initial three year contract on 21 January 2019. Portal
development and decline advance at the southern end of the Rosemont Main open pit began in February 2019 with first
ore expected to be mined in the September 2019 quarter.
Development - 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 July 2019, the Company announced an updated Ore Reserve of 60.8 million tonnes at 1.04g/t Au for 2.02 million
ounces.
REGIS RESOURCES | DIRECTORS' REPORT (continued) 27
During the year, the Company continued to progress the pipeline route access to utilise recycled water from the Mt Piper
Power Station and Centennial Mine near Lithgow. This is one of the two long term water supply options for the Project.
Finalisation of a formal water agreement with Centennial Coal Company and Energy Australia Ltd is progressing. The
Company continues to hold approximately 4.5GLpa of ground water access licences in a zone of the Lachlan catchment,
approximately 80 kilometres from the Project as an alternative water supply.
Subsequent to the end of the year, the Company submitted the McPhillamys State Significant Development Application
along with the Environmental Impact Statement (‘EIS’) for appraisal and assessment by the New South Wales Department
of Planning, Industry and Enviroment.
Work is continuing on the Definitive Feasibility Study (‘DFS’), which will incorporate the requirements for the project
development emanating from the results of the EIS. The DFS will further define the operating parameters, estimated capital
and operating costs and a development timetable.
Garden Well Underground
A total of 19,264 metres of resource and diamond drilling was undertaken during the year to test the down plunge continuity
of the high grade gold mineralisation located at the southern end of the Garden Well open pit design. Drilling to date has
identified a high grade gold shoot plunging moderately to the south, extending from the southern end of the open pit, which
measures 4 to 10 metres true width across strike and 80 to 100 metres down dip.
Results continue to show significant widths and grades of gold mineralisation, demonstrating the potential for a maiden
underground resource. A preliminary evaluation of the underground potential is underway with results to be announced
when available.
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 11.4 million tonnes at 0.96g/t for 363,000 ounces of gold. 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. The deposits
are similar in style to the Rosemont Gold deposit, with mineralisation confined to the quartz dolerite.
A RC drilling programme was undertaken during the year to test for extensions to the open pit oxide resources. Further
drilling was undertaken to target high grade gold shoots in fresh rock across a 2 kilometre strike beneath the pit designs.
Four high grade gold shoots have been identified beneath the Baneygo pits and are open down plunge. Results indicate
the high grade shoots measure up to seven metres true width across strike and 40 metres down dip.
Drilling will continue in order to assess the grade and thickness of multiple high grade shoots and their suitability for
underground development.
Moolart Well Gold Mine
During the year, Regis completed an extensive aircore (‘AC’) and RC drilling programme which aimed to test for shallow
oxide resources, test down dip extensions of gold mineralisation beneath the existing pits and to increase the drill density
in the existing resource envelopes, in order to convert additional resources to reserves. Subsequent to the end of the
year, the Company announced that this drilling had contributed to an additional 3.4 million tonnes at 0.89g/t Au for 89,000
ounces to the reserve base which will extend the life of mine at Moolart Well for at least another 12 months.
In addition, a programme of diamond drilling commenced in the June quarter to test the stratigraphy and gold mineralised
structures beneath the existing oxide pits. Gold mineralisation in fresh rock at Moolart Well is largely untested and presents
as a highly prospective target. Encouraging gold assay results have been received for the first diamond hole drilled at the
northern end of the Moolart Well deposit which supports the view that there are gold mineralised structures in fresh rock.
Work will continue to determine the extent of hypogene gold mineralisation in fresh rock beneath the existing oxide pits.
REGIS RESOURCES | 2019 ANNUAL REPORT 28
S I G N I F I C A N T C H A N G E S I N T H E S T A T E O F A F F A I R S
There have been no significant changes in the state of affairs other than those listed in the review of operations above.
S I G N I F I C A N T E V E N T S A F T E R T H E B A L A N C E D A T E
Share issue
Subsequent to year end, 249,913 shares have been issued as a result of the exercise of employee options for proceeds
of $84,000.
Dividends
On 16 August 2019, the directors proposed a final dividend on ordinary shares in respect of the 2019 financial year. Refer
to note 6.
Senior Management changes
On 31 July 2019, Mr Jon Latto was appointed as the Company’s Chief Financial Officer. Mr Latto has been interim Chief
Financial Officer of the Company since 30 June 2019.
On 1 July 2019, Mr Kim Massey resigned from the position of Chief Financial Officer.
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:
REGIS RESOURCES | DIRECTORS' REPORT (continued) 29
the operations of the Group;
the results of those operations; or
the state of affairs of the Group
in future financial years.
L I K E L Y D E V E L O P M E N T S A N D E X P E C T E D R E S U L T S
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.
E N V I R O N M E N T A L R E G U L A T I O N A N D P E R F O R M A N C E
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 | 2019 ANNUAL REPORT 30
S H A R E O P T I O N S
Unissued Shares
At the date of this report, the Company had the following unissued shares under listed and unlisted options.
MATURITY DATE
Unlisted options
1 July 2021
EXERCISE PRICE
NUMBER
OUTSTANDING
$3.90
995,000
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 3,431,354 fully paid ordinary shares in Regis
Resources Limited at a weighted average exercise price of $1.43 per share.
I N D E M N I F I C A T I O N A N D I N S U R A N C E O F
D I R E C T O R S A N D O F F I C E R S
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.
D I R E C T O R S ’ M E E T I N G S
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
J Mactier
J Beyer (appointed 15 October 2018)
P Thomas
R Kestel
F Morgan
S Scudamore (appointed 13 May 2019)
M Clark (retired 23 November 2018)
M Okeby (retired 20 February 2019)
12
9
12
12
12
3
5
7
12
9
10
12
12
3
5
6
1
n/a
n/a
1
1
n/a
n/a
1
1
n/a
n/a
1
1
n/a
n/a
1
4
n/a
n/a
4
n/a
n/a
n/a
3
4
n/a
n/a
4
n/a
n/a
n/a
3
REGIS RESOURCES | DIRECTORS' REPORT (continued) 31
Committee Membership
As at the date of this report, the Company had an Audit and Risk Management Committee and a Remuneration, Nomination
and Diversity Committee of the board of directors.
Members acting on the committees of the board during the year were:
AUDIT AND RISK MANAGEMENT COMMITTEE
REMUNERATION, NOMINATION AND DIVERSITY COMMITTEE
R Kestel (Chairman)
J Mactier
F Morgan
R Kestel (Chairman)
J Mactier
S Scudamore (appointed 13 May 2019)
S Scudamore (appointed 13 May 2019)
M Okeby (retired 20 February 2019)
M Okeby (retired 20 February 2019)
D I R E C T O R S ’ I N T E R E S T S I N T H E S H A R E S A N D O P T I O N S
O F T H E C O M P A N Y
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 2019 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.
J Mactier
J Beyer
R Kestel
F Morgan
P Thomas
NUMBER OF
ORDINARY
SHARES
25,000
29,000
75,000
510,780
95,333
A U D I T O R I N D E P E N D E N C E A N D N O N - A U D I T S E R V I C E S
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
$
18,963
18,963
A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act is attached to
the Directors’ Report.
R O U N D I N G O F F
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 | 2019 ANNUAL REPORT 32
R E M U N E R A T I O N
R E P O R T ( A U D I T E D )
This remuneration report for the year ended 30 June 2019
outlines the remuneration arrangements of the Company
and the Group.
This remuneration report for the year ended 30 June 2019 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 Non-Executive Chairman, senior executives and the
Company Secretary of the Parent and the Group.
K E Y M A N A G E M E N T P E R S O N N E L
Details of KMPs of the Company and Group and their movements during the year ended 30 June 2019 are set out below:
NAME
POSITION
TERM AS KMP
Non-executive directors
J Mactier
R Kestel
F Morgan
Non-Executive Chairman
Appointed as Non-Executive Chairman, on 23
November 2018. Previously Non-Executive Director
Non-Executive Director
Full financial year
Non-Executive Director
Full financial year
S Scudamore
Non-Executive Director
Appointed 13 May 2019
M Okeby
Non-Executive Deputy Chairman
Retired 20 February 2019
Executive directors
J Beyer
P Thomas
M Clark
Other executives
Chief Executive Officer and
Managing Director
Appointed 15 October 2018
Executive Director
Full financial year
Executive Chairman/
Non-Executive Chairman
Resigned as Executive Chairman on 15 October 2018.
Retired as Non-Executive Chairman on 23 November 2018
J Latto
Company Secretary
Appointed as Company Secretary, on 24 June 2019
K Massey
M Ertzen
Chief Financial Officer and
Company Secretary
Chief Financial Officer - Full financial year.
Resigned as Company Secretary on 24 June 2019
Executive General
Manager - Growth
Resigned 7 December 2018
R E G I S R E S O U R C E S | R E M U N E R A T I O N R E P O R T ( A U D I T E D )
33
P R I N C I P L E S O F R E M U N E R A T I O N
The Remuneration, Nomination and Diversity Committee is charged with formulating the Group’s remuneration policy,
reviewing each director’s remuneration and reviewing the Chief Executive Officer and Managing Director’s remuneration
recommendations for KMPs to ensure compliance with the Remuneration Policy and consistency across the Group.
Recommendations of the Remuneration, Nomination and Diversity Committee are put to the Board for approval.
Remuneration levels for KMP are set to attract, retain and incentivise appropriately qualified and experienced directors
and executives. The Company rewards 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 2019 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 (“KPI”).
In FY19, the STI represented the annual component of the “at risk” reward opportunity which is payable in 50% in cash and
50% in performance rights (which vest 12 months after the end of financial year) upon the successful achievement of work
related financial and non-financial KPIs. These KPIs 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 2019 financial year:
FIXED REMUNERATION
Base salary + superannuation + benefits
VARIABLE REMUNERATION
STI plan
LTI plan
Cash and Performance rights
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 | 2019 ANNUAL REPORT 34
R E M U N E R A T I O N M I X – T A R G E T
32%
40%
31%
42%
29%
44%
Chief
Executive
Officer and
Managing
Director
Executive
Director
Other
Executives
28%
27%
27%
Fixed remuneration
STI
LTI
E L E M E N T S O F R E M U N E R A T I O N I N F Y 1 9
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 and industry surveys may
provide analysis and advice to ensure the KMP’s remuneration is competitive in the market place, as required. In October
2018, 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) 35
Short Term Incentive
Under the STI plan, all executives have the opportunity to earn an annual incentive. The STI recognises and rewards annual
performance.
How is it paid?
Any STI award is paid 50% in cash and 50% in performance rights (which vest 12 months after the
end of financial year), after the assessment of annual performance.
How much can
executives earn?
In FY19, the Chief Executive Officer and Managing Director and the Executive Director had a
maximum STI opportunity of 70% and 65% respectively of remuneration, and other executives had a
maximum STI opportunity of 60% of 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 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 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: Rosemont Underground targets as determined by the Board (20%).
When is it paid?
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 50% of the award is paid in cash 3 months after the end of the financial year and the remaining
50% is paid in performance rights which vest 12 months after the end of financial year subject to
shareholder approval for Directors.
What happens if
executive leaves?
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 | 2019 ANNUAL REPORT 36
Long Term Incentives
Under the LTI plan, annual grants of performance rights are made to executives to align remuneration with the creation of
shareholder value over the long-term.
How is it paid?
How much can
executives earn?
Executives are eligible to receive performance rights (being the issue of shares in Regis in the future).
In FY19, the Chief Executive Officer and Managing Director and the Executive Director had a
maximum LTI opportunity of 80% 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 FY19 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
Rosemont underground targets as determined by the Board (15%).
When is performance
measured?
The performance rights issued in FY18 and FY19 have a three year performance period with the
vesting of the rights tested as at 30 June 2020 and 30 June 2021 respectively. 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.
What happens if
executive leaves?
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) 37
P E R F O R M A N C E A N D E X E C U T I V E R E M U N E R A T I O N
O U T C O M E S I N F Y 1 9
Actual remuneration earned by executives in FY19
The actual remuneration earned by executives in the year ended 30 June 2019 is set out below. This provides shareholders
with a view of the remuneration actually paid to executives for performance in FY19 year and the value of LTIs that vested
during the period.
Performance against STI measures
A combination of financial and non-financial measures is used to measure performance for STI rewards. Company
performance against those measures is as follows for 2019:
KEY PERFORMANCE INDICATOR
WEIGHTING METRIC
ACHIEVEMENT
KPI 1: EBITDA
20%
EBITDA relative to Budget
KPI 2: Production
20%
Production relative to stated guidance
KPI 3: Safety and Environment
20%
KPI 4: McPhillamys Project
targets
KPI 5: Rosemont
Underground targets
20%
20%
Reduction in safety
and environmental measures
McPhillamys Project targets
as determined by the Board
Stretch target achieved –
100% award
Threshold target achieved –
47% award
Threshold target achieved –
75% award
Threshold target achieved –
75% award
Rosemont Underground targets
as determined by the Board
Stretch target achieved –
100% award
Based on this assessment, the STI cash payments for FY19 to executives were recommended as detailed in the following table:
NAME
POSITION
ACHIEVED STI
STI AWARDED
(50% CASH COMPONENT)
Jim Beyer(i)
Chief Executive Officer and Managing Director
Paul Thomas
Chief Operating Officer
Kim Massey
Chief Financial Officer & Company Secretary
%
78.80%
78.80%
78.80%
$
149,428
168,258
116,486
(i)
The STI cash component for Mr Beyer has been pro-rated based on his commencement date of 15 October 2018.
Performance against LTI measures
LTI awards granted in FY19 will be subject to testing at the end of the three year performance period on 30 June 2021. In
November 2018, after receiving approval from shareholders at the AGM, 373,924 performance rights were granted in total
to Executive Directors Mr Jim Beyer and Mr Paul Thomas, and to executive, Mr Kim Massey, under the Group’s Executive
Incentive Plan (“EIP”). Mr Kim Massey resigned from his position as Chief Financial Officer on 1 July 2019. The forfeit of
LTI rewards has been recorded during the year ended 30 June 2019 as his resignation notice was given during the period.
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 in FY18 will be subject to testing at the end of the three year performance period on 30 June 2020.
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. Mr Peter Woodman resigned from his position as Chief Geological Officer on 20 March 2018, Mr Mark Clark
retired from his position as Non-Executive Director on 23 November 2018 and Mr Kim Massey resigned from his position as
Chief Financial Officer on 1 July 2019 and consequently all forfeited their 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.
None of the performance rights granted have vested, nor are they exercisable on 30 June 2019.
REGIS RESOURCES | 2019 ANNUAL REPORT 38
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.
2019
$’000
2018
$’000
2017
$’000
2016
$’000
2015
$’000
Revenue
654,807
606,495
543,799
502,019
465,320
Net profit/(loss) after tax
163,149
174,231
138,163
111,793
86,920
Basic earnings/(loss) per share (cents)
Diluted earnings/(loss) per share (cents)
32.18
32.12
34.60
34.35
27.59
27.29
22.37
22.22
17.39
17.39
Net assets
716,463
636,842
538,392
481,848
409,973
P E R F O R M A N C E A N D E X E C U T I V E R E M U N E R A T I O N
A R R A N G E M E N T S I N F Y 2 0
Subsequent to the end of the 2019 financial year, the Board resolved to set STI and LTI hurdles as follows for the 2020
financial year:
COMPONENT
LINKS TO FY2020 PERFORMANCE
Total Fixed Remuneration (TFR) Salaries awarded effective 1 July 2019 are used as the basis for determining the value
component for the FY2020 STI and LTI.
The maximum STI opportunity that each KMP can earn are:
Chief Executive Officer and Managing Director 70%
Chief Operating Officer
Other executives
65%
60%
The maximum LTI opportunity that each KMP can earn are:
Chief Executive Officer and Managing Director 80%
Chief Operating Officer
Other executives
75%
65%
Short Term Incentives (STI)
The following KPIs were chosen for the 2020 financial year:
KPI 1: EBITDA relative to budget (20%(i));
KPI 2: Production relative to stated guidance (20%(i));
KPI 3: Safety and environmental targets (20%(i));
KPI 4: Growth targets (30%) to be apportioned:
» McPhillamys Project targets as determined by the Board (20%);
» Garden Well Underground targets as determined by the Board (10%); and
KPI 5: Individual performance against objectives set by the relevant KMP’s manager (10%).
The Board retains discretion to adjust the STI mechanism.
REGIS RESOURCES | REMUNERATION REPORT (AUDITED) (continued) COMPONENT
LINKS TO FY2020 PERFORMANCE
Long Term Incentives (LTI)
The performance rights issued in 2020 are subject to the following vesting conditions:
39
Relative Total Shareholder Return (20%(i)) measured on a sliding scale against a select
peer group of comparator companies (ASX code: EVN, NST, PRU, RSG, SAR, SBM,
WGX, NCM, OGC, SLR, GOR, RMS);
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);
LOM Reserve growth in excess of depletion (15%). For clarity, vesting will depend on the
Company’s growth in ore reserves over the three year performance period, calculated
at the percentage that the Company ore reserves at 30 June 2022 represent of the
Company’s ore reserves as at 30 June 2019;
McPhillamys Project targets as determined by the Board (15%); and
Production Growth (15%). Annual production growth above levels contained in the Life of
Mine Plan.
(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 | 2019 ANNUAL REPORT 40
S E R V I C E C O N T R A C T S
The Group has entered into service contracts with each KMP. The service contract outlines the components of remuneration
paid to each KMP 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 KMP
and any changes required to meet the principles of the remuneration policy.
Each KMP, 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 KMPs 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.
Mr Jim Beyer, the Company’s Chief Executive Officer and Managing Director, is employed under a contract with the
following termination provisions:
Employer initiated termination:
NOTICE
PERIOD
PAYMENT IN
LIEU OF NOTICE
ENTITLEMENT TO OPTIONS AND
RIGHTS ON TERMINATION
3 months plus 9 months’ salary
12 months
Not less than 3 months
Not less than 3 months
0 – 1 month
0 – 1 month
Options - 1 month to exercise,
extendable at Board discretion
Rights – refer to LTI details above
without reason
with reason
serious misconduct
Employee initiated
termination
Change of control
1 month plus 12 months’ salary
Not specified
3 months
Not specified
Mr Paul Thomas, the Company’s Chief Operating Officer, is employed under a contract with the following termination
provisions:
Employer initiated termination:
with or without reason
serious misconduct
Employee initiated
termination
NOTICE
PERIOD
PAYMENT IN
LIEU OF NOTICE
ENTITLEMENT TO OPTIONS AND
RIGHTS ON TERMINATION
3 months
Up to 3 months
0 – 1 month
0 – 1 month
Options - 1 month to exercise,
extendable at Board discretion
Rights – refer to LTI details above
3 months
Not specified
Change of control
1 month plus 12 months’ salary
Not specified
Mr Jon Latto, the Company’s Interim Chief Financial Officer and Company Secretary is appointed on a casual fixed term
basis and is entitled to 1 months’ notice on termination.
N O N - E X E C U T I V E D I R E C T O R S
Total remuneration for all non-executive directors, last voted upon by shareholders at the 2018 AGM, is not to exceed
$700,000 per annum. At the date of this report, total non-executive directors’ fees are $525,000 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.
As above
As above
As above
As above
REGIS RESOURCES | REMUNERATION REPORT (AUDITED) (continued) 41
K E Y M A N A G E M E N T P E R S O N N E L R E M U N E R A T I O N
Table 1: Remuneration for the year ended 30 June 2019
SHORT TERM
POST
EMPLOYMENT
LONG-
TERM
BENEFITS
SHARE-
BASED
PAYMENT
2019
SALARY &
FEES
CASH
REWARDS
NON-
MONETARY
BENEFITS*
SUPER-
ANNUATION
ACCRUED
ANNUAL
& LONG
SERVICE
LEAVE#
OPTIONS &
RIGHTS+
TERMINATION
PAYMENTS
TOTAL
PERFOR-
MANCE
RELATED
$
$
$
$
$
$
$
$
%
Non-executive directors
J Mactier(i)
R Kestel(ii)
144,256
130,000
F Morgan(iii)
115,000
S Scudamore(iv)
16,923
M Okeby(v)
236,525
Executive directors
-
-
-
-
-
-
-
-
-
-
13,704
12,350
10,925
1,608
24,645
-
-
-
-
-
-
-
-
-
-
J Beyer(vi)
501,667
389,428
4,142
47,658
44,994
89,384
P Thomas(xi)
583,537
168,258
5,523
25,000
91,771
179,989
M Clark(vii,xi)
249,843
Other executives
J Latto(viii)
48,333
-
-
2,301
13,705
6,242
(37,964)
460
4,592
-
-
K Massey(ix,xi)
454,155
116,486
5,523
26,479
68,470
(96,211)
M Ertzen(x)
162,630
-
2,301
13,693
27,627
(44,014)
-
-
-
-
-
-
-
-
-
-
-
157,960
142,350
125,925
18,531
261,170
-
-
-
-
-
1,077,273
44.45%
1,054,078
33.04%
234,127
53,385
-
-
574,902
20.26%
162,237
-
Total
2,642,869
674,172
20,250
194,359
239,104
91,184
- 3,861,938
* 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. Where the
amount is negative this represents a reversal of expense previously recognised where the KMP has foregone the LTI due to resignation or retirement.
(i) Mr Mactier was appointed Non-Executive Chairman effective 23 November 2018. Previously he was a Non-Executive Director. Prior to his appointment
as Non-Executive Chairman on 23 November 2018, Mr Mactier’s fees included $10,000 pro-rata for his role on both the Audit Committee and the
Remuneration Committee. Subsequent to this date, Mr Mactier’s Director fees of $160,000 per annum are inclusive of all committee fees.
(ii) Mr Kestel’s fees include $20,000 for chairing the Board Committees.
(iii) Ms Morgan’s fees include $5,000 for her role on the Audit Committee.
(iv) Mr Scudamore was appointed Non-Executive Director on 13 May 2019 and his fees include $1,410 for his role on both the Audit and Risk Management
Committee and the Remuneration, Nomination and Diversity Committee.
(v) Mr Okeby retired on 20 February 2019, his fees include $156,664 for additional services relating to the McPhillamys project.
(vi) Mr Beyer was appointed Chief Executive Officer and Managing Director on 15 October 2018. Cash rewards include a $240,000 sign-on bonus in lieu of
benefits foregone.
(vii) Mr Clark stepped down as Managing Director and Executive Chairman on 15 October 2018 and assumed the role of Non-Executive Chairman until his
retirement on 23 November 2018.
(viii) Mr Latto was appointed as Interim Chief Financial Officer on 20 May 2019 and as Company Secretary on 24 June 2019.
(ix) Mr Massey resigned as Company Secretary on 24 June 2019.
(x) Mr Ertzen resigned as Executive General Manager - Growth effective 7 December 2018.
(xi) Mr Clark, Mr Thomas and Mr Massey elected to receive a portion of their superannuation entitlements above the statutorily required maximum amount
as salary.
REGIS RESOURCES | 2019 ANNUAL REPORT 42
Table 2: 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
TOTAL
PERFOR-
MANCE
RELATED
$
$
$
$
$
$
$
$
%
Non-executive directors
R Kestel
J Mactier
F Morgan
97,000
85,000
85,000
M Okeby
302,468
Executive directors
-
-
-
-
-
-
-
-
9,215
8,075
8,075
29,606
-
-
-
-
-
-
-
-
M Clark
701,114
235,676
4,756
25,000
69,491
861,186
P Thomas
566,672
167,592
4,756
25,000
54,223
305,481
Other executives
K Massey
382,229
109,982
4,756
25,000
38,486
331,032
-
-
-
-
-
-
-
106,215
93,075
93,075
332,074
-
-
-
-
1,897,223
57.81%
1,123,724
42.10%
891,485
49.47%
P Woodman
273,708
M Ertzen
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.
Table 3: Voluntary information – Non-IFRS – Remuneration received by executives
for the year ended 30 June 2019
The amounts disclosed below as executive KMP remuneration for 2019 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 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, Mr Massey and Mr Ertzen) and November 2015 (M Clark). There
were no performance rights that vested during the year.
REGIS RESOURCES | REMUNERATION REPORT (AUDITED) (continued) 43
Executive directors
J Beyer(ii)
P Thomas
M Clark(i)
Other executives
J Latto(iv)
K Massey
M Ertzen(iii)
FIXED REMUNERATION
AWARDED STI (CASH)
VESTED LTI
TOTAL VALUE
$
793,467
662,522
484,276
53,385
498,273
311,936
$
-
183,513
258,065
$
-
$
793,467
637,500
1,483,535
2,107,500
2,849,841
-
-
53,385
120,430
1,275,000
1,893,703
-
510,000
821,936
Total executive KMP
2,803,859
562,008
4,530,000
7,895,867
Non-executive directors
705,936
-
-
705,936
Total KMP remuneration
3,509,795
562,008
4,530,000
8,601,803
(i) Mr Clark retired from his role as Managing Director on 15 October 2018. He subsequently continued on as Non-Executive Chairman until 23 November
2018. The remuneration presented above is for the period prior to his retirement.
(ii) Mr Beyer was appointed as Chief Executive Officer and Managing Director on 15 October 2018. The remuneration presented above is for the period
subsequent to this appointment.
(iii) Mr Ertzen resigned as Executive General Manager – Growth on 7 December 2018. The remuneration presented above is for the period prior to his
resignation.
(iv) Mr Latto was appointed as Interim Chief Financial Officer on 20 May 2019, and Company Secretary on 24 June 2019. The remuneration presented above
is 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 ($3,861,938 for 2019, 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 | 2019 ANNUAL REPORT 44
Tables 4 & 5: Rights and options over equity instruments granted as compensation
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
750,000
12 Nov 15
$1.27
$1.40
11 Aug 19
11 Aug 18
750,000
100%
P Thomas
250,000
12 Aug 15
$0.74
$1.40
11 Aug 19
11 Aug 18
250,000
100%
K Massey
500,000
12 Aug 15
$0.74
$1.40
11 Aug 19
11 Aug 18
500,000
100%
-
-
-
M Ertzen(i)
M Ertzen(i)
M Ertzen(i)
50,000
5 Jul 17
$1.28
$3.90
1 Jul 21
5 Jul 19
50,000
5 Jul 17
$1.87
$3.90
1 Jul 21
5 Jul 20
-
-
-
-
100%
100%
200,000
12 Aug 15
$0.74
$1.40
11 Aug 19
11 Aug 18
200,000
100%
-
Total
1,800,000
1,700,000
(i) Mr Ertzen resigned as Executive General Manager – Growth on 7 December 2018 and forfeited the right to the unvested options held at that date.
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(i)
P THOMAS K MASSEY(ii)
J BEYER
% 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
23 Nov 18
$0.77 30 Jun 21
Absolute TSR
23 Nov 18
$0.83 30 Jun 21
Earnings per share
23 Nov 18
$3.89 30 Jun 21
Ore reserves
23 Nov 18
$3.89 30 Jun 21
McPhillamys
23 Nov 18
$3.89 30 Jun 21
Rosemont
Underground
23 Nov 18
$3.89 30 Jun 21
-
-
-
-
-
-
25,837
16,794
32,153
25,837
16,794
32,153
19,378
12,596
24,115
19,378
12,596
24,115
19,378
12,596
24,115
19,378
12,596
24,115
173,554
242,822
155,596
160,766
-
-
-
-
-
-
-
-
-
-
68%
68%
68%
68%
22%
22%
22%
22%
22%
22%
Value of rights granted during the year
$Nil $342,707 $222,758 $426,480
(i) Mr Clark stepped down as Managing Director and Executive Chairman on 15 October 2018 and assumed the role of Non-Executive Chairman until his
retirement on 23 November 2018. Mr Clark forfeited the right to unvested performance rights held at the date of his retirement on 23 November 2018.
(ii) Mr Massey resigned as Chief Financial Officer on 1 July 2019. The forfeit of the unvested performance rights has been recorded during the year ended
30 June 2019 as his resignation notice was given during the period.
REGIS RESOURCES | REMUNERATION REPORT (AUDITED) (continued) 45
In relation to the performance rights granted in November 2017 and November 2018, there is a three year performance
period which ends on 30 June 2020 and 30 June 2021 respectively, with the testing to occur within 60 days after the end
date. Any performance rights which do not vest will lapse after testing. There is no re-testing of performance rights.
In addition to a continuing employment service condition, vesting of the performance rights is conditional upon the
Group achieving certain performance hurdles. Details of the performance criteria are included in the long-term incentives
discussion on page 36.
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
2018 to 30 June 2021). 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 and performance rights 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
1 JULY 2018
GRANTED AS
REMUNERATION
EXERCISED
HELD AT
END OF
PERIOD
30 JUNE
2019
NET
CHANGE
OTHER
VESTED AT 30 JUNE 2019
TOTAL
EXERCISABLE
NOT
EXERCISABLE
Options
M Clark(i)
750,000
P Thomas(iii)
250,000
K Massey(iv)
500,000
M Ertzen(v,vi)
300,000
Rights
M Clark(ii)
341,554
-
-
-
-
-
(750,000)
(250,000)
(500,000)
-
-
-
n/a
-
-
(200,000)
(100,000)
n/a
(168,000)
(173,554)
n/a
P Thomas
208,969
129,187
(95,333)
-
242,823
K Massey
140,958
83,971
(69,333)
(155,596)
-
J Beyer(vii)
n/a
160,766
-
-
160,766
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(i)
(ii)
The intrinsic value of options exercised by Mr Clark during the year was $2,107,500. As a result of exercising options and paying an exercise price of
$1,050,000 Mr Clark was issued with 750,000 ordinary shares. No amounts remain unpaid on the shares issued.
‘Net change other’ is a result of Mr Clark’s retirement as Non-Executive Chairman on 23 November 2018. He forfeited the right to the unvested
performance rights held at that date.
(iii) The intrinsic value of options exercised by Mr Thomas during the year was $637,500. Mr Thomas exercised his options using the cashless exercise feature
available under the Regis ESOP and was issued with 168,415 ordinary shares as a result. No amounts remain unpaid on the shares issued.
(iv) The intrinsic value of options exercised by Mr Massey during the year was $1,275,000. Mr Massey exercised his options using the cashless exercise
feature available under the Regis ESOP and was issued with 336,830 ordinary shares as a result. No amounts remain unpaid on the shares issued.
(v) The intrinsic value of options exercised by Mr Ertzen during the year was $510,000. Mr Ertzen exercised his options using the cashless exercise feature
available under the Regis ESOP and was issued with 134,732 ordinary shares. No amounts remain unpaid on the shares issued.
(vi)
‘Net change other’ is a result of Mr Ertzen’s resignation as Executive General Manager – Growth on 7 December 2018 and he forfeited the right to the
unvested options held at that date.
(vii) Mr Beyer was appointed as Chief Executive Officer and Managing Director on 15 October 2018 and was issued rights in November 2018 with a three year
performance period. No options were granted subsequent to this appointment.
There were no options granted to KMPs during the year. All unvested options and rights held by Mr Clark on the date of
retirement were forfeited, all unvested options held by Mr Ertzen on the date of resignation were forfeited and all unvested
rights held by Mr Massey 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 | 2019 ANNUAL REPORT 46
Table 7: Shareholdings of key management personnel
The movement during the reporting period in the number of ordinary shares in Regis Resources Limited held, directly,
indirectly or beneficially, by each key management person, including their related parties, is as follows:
Non-executive directors
M Okeby(i)
R Kestel
J Mactier
F Morgan
Executive directors
M Clark(ii)
P Thomas
J Beyer(iii)
Other executives
K Massey
M Ertzen(iv)
Total
HELD AT
1 JULY 2018
ON EXERCISE OF
OPTIONS/RIGHTS
NET CHANGE OTHER
HELD AT
30 JUNE 2019
700,000
75,000
-
510,780
-
-
-
-
3,000,000
918,000
-
-
25,000
-
-
-
n/a
263,938
(168,605)
-
29,000
-
405,399
(336,066)
200,000
134,732
(334,732)
n/a
75,000
25,000
510,780
n/a
95,333
29,000
69,333
n/a
4,488,230
1,389,403
(785,403)
642,230
KPMG
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 2019 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
(i) Mr Okeby retired as a Non-Executive Director on 20 February 2019. He held 700,000 shares at that date.
(ii) Mr Clark retired as Non-Executive Chairman on 23 November 2018. He held 3,918,000 shares at that date.
(iii) Mr Beyer was appointed as Chief Executive Officer and Managing Director on 15 October 2018.
(iv) Mr Ertzen resigned as Executive General Manager - Growth effective 7 December 2018. He did not hold any shares at this date.
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 2019, services totalling $453,384 (2018: $645,073) have been provided on normal commercial
terms to the Group by Mintrex Pty Ltd (“Mintrex”), 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 2019 was $5,986.25,
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.
R Gambitta
Partner
Perth
16 August 2019
Mr James Mactier
Non-Executive Chairman
Perth, 16 August 2019
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 | REMUNERATION REPORT (AUDITED) (continued)
47
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 2019 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
R Gambitta
Partner
Perth
16 August 2019
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 | 2019 ANNUAL REPORT
48
F I N A N C I A L
S T A T E M E N T S
CO N SO L I DAT ED STAT EM EN T
O F CO M PR EH EN SI V E I N CO M E
For the year ended 30 June 2019
49
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
Realised gains transferred to net profit
Tax effect
Other comprehensive (loss)/income for the period, net of tax
NOTE
2
3
2
23
15
3
18
5
CONSOLIDATED
2019
$’000
654,807
(401,970)
252,837
2018
$’000
606,495
(343,585)
262,910
4,379
3,396
(2,521)
(9,360)
(1,082)
(1,005)
(659)
(6,729)
(940)
(1,447)
233,473
(70,323)
163,150
163,150
(1,818)
(8,479)
(3,231)
(584)
(636)
(353)
(1,011)
(1,273)
248,921
(74,690)
174,231
174,231
-
-
-
(188)
78
(110)
Total comprehensive income for the period
163,150
174,121
Total comprehensive income attributable to members of the parent
163,150
174,121
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
32.18
32.12
34.60
34.35
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
REGIS RESOURCES | 2019 ANNUAL REPORT 50
CO N SO L I DAT ED
BA L A N C E SH EE T
As at 30 June 2019
Current assets
Cash and cash equivalents
Gold bullion awaiting settlement
Receivables
Inventories
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
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
2019
$’000
188,697
-
7,674
56,077
269
2,198
2018
$’000
181,118
21,160
5,954
43,438
344
1,354
254,915
253,368
55,898
242,988
185,748
44,163
167,713
2,572
699,082
953,997
67,613
793
12,224
3,479
84,109
1,328
91,305
60,791
153,424
237,533
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
716,464
636,842
434,880
31,079
250,505
716,464
433,248
29,997
173,597
636,842
The above balance sheet should be read in conjunction with the accompanying notes.
REGIS RESOURCES | 2019 ANNUAL REPORT CO N SO L I DAT ED STAT EM EN T
O F C H A N G ES I N EQ U I T Y
For the year ended 30 June 2019
51
CONSOLIDATED
SHARE-
BASED
PAYMENT
RESERVE
FINANCIAL
ASSETS
RESERVE
CASH
FLOW
HEDGE
RESERVE
ISSUED
CAPITAL
RETAINED
PROFITS/
(ACCU-
MULATED
LOSSES)
TOTAL
EQUITY
$’000
$’000
$’000
$’000
$’000
$’000
Shares issued, net of transaction costs
1,632
At 30 June 2019
434,880
29,362
1,717
At 30 June 2018
433,248
28,280
1,717
Adjustment on adoption of AASB 15 on 1 July 2018 (Note 2)
-
-
-
433,248
28,280
1,717
At 1 July 2018
Profit for the period
Other comprehensive income
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 2017
Profit for the period
Other comprehensive income
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
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,082
-
-
-
-
-
-
-
-
-
-
-
-
-
3,231
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
173,597 636,842
(5,046)
(5,046)
168,551 631,796
163,150 163,150
-
-
-
-
163,150 163,150
-
1,082
(81,196)
(81,196)
-
1,632
250,505 716,464
-
174,231
174,231
(110)
(110)
(110)
-
-
(110)
(110)
174,231
174,121
-
-
-
-
-
3,231
(80,659)
(80,659)
-
1,757
173,597 636,842
431,491
25,049
1,717
110
80,025 538,392
Shares issued, net of transaction costs
1,757
At 30 June 2018
433,248
28,280
1,717
The above statement of changes in equity should be read in conjunction with the accompanying notes.
REGIS RESOURCES | 2019 ANNUAL REPORT 52
CO N SO L I DAT ED STAT EM EN T
O F CASH F LOWS
For the year ended 30 June 2019
NOTE
Cash flows from operating activities
Receipts from gold sales
Payments to suppliers and employees
Option premium income received
Interest received
Interest paid
Proceeds from rental income
Income tax paid
Net cash from operating activities
7
Cash flows from investing activities
Acquisition of property, plant and equipment
Proceeds on disposal of property, plant and equipment
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
CONSOLIDATED
2019
$’000
652,450
(326,680)
1,366
2,388
(85)
17
(53,971)
275,485
(56,426)
31
(34,838)
-
-
(2)
77
(35,632)
(60,500)
(187,290)
1,697
(65)
(81,196)
(1,052)
(80,616)
7,579
181,118
Cash and cash equivalents at 30 June
7
188,697
The above statement of cash flows should be read in conjunction with the accompanying notes.
2018
$’000
608,200
(314,824)
1,197
2,087
(69)
4
(36,868)
259,727
(37,452)
(144)
(32,410)
(50)
(1,490)
(82)
-
(14,053)
(31,949)
(117,630)
1,810
(53)
(80,659)
(1,505)
(80,407)
61,690
119,428
181,118
REGIS RESOURCES | 2019 ANNUAL REPORT 53
54
Basis of preparation
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
56
57
58
60
62
63
64
64
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
66
66
66
67
68
69
71
71
73
74
74
N O T E S T O T H E
F I N A N C I A L
S T A T E M E N T S
Capital structure, financial instruments and risk 76
Other disclosures
18. Net Debt and Finance Costs
19. Financial Assets
20. Financial Risk Management
21. Issued Capital and Reserves
76
77
78
81
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
30. New Accounting Standards and Interpretation
55
82
82
84
87
89
90
91
91
91
92
N O T E S T O T H E
F I N A N C I A L
S T A T E M E N T S
56
B A S I S O F P R E P A R A T I O N
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 16 August 2019.
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 2017. 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.
57
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 60
Page 67
Page 69
Page 71
Page 73
Page 74
Page 82
Page 84
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.
P E R F O R M A N C E F O R T H E Y E A R
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 Chief Executive
Officer and Managing Director 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 2018.
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 | 2019 ANNUAL REPORT
58
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.
The following table presents financial information for reportable segments for the years ended 30 June 2019 and 30 June
2018:
DUKETON NORTH
OPERATIONS
DUKETON SOUTH
OPERATIONS
UNALLOCATED
TOTAL
2019
2018
2019
2018
2019
2018
2019
2018
CONTINUING OPERATIONS
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Segment revenue
Sales to external customers
161,014 175,568 491,436 428,857
-
- 652,450 604,425
Other revenue
-
-
-
-
2,357
2,070
2,357
2,070
Total segment revenue
161,014 175,568 491,436 428,857
2,357
2,070 654,807 606,495
Total revenue per the statement of
comprehensive income
654,807 606,495
Interest expense
Impairment of non-current assets
-
-
-
-
-
-
-
-
85
69
85
69
6,729
353
6,729
353
Depreciation and amortisation
14,414
17,677
59,489
46,635
529
265
74,432
64,577
Depreciation capitalised
Total depreciation and amortisation
recognised in the statement of
comprehensive income
Segment result
Segment net operating profit/
(loss) before tax
Segment assets
(209)
(140)
74,223
64,437
57,908
84,438 192,265
177,167 (16,700)
(12,684) 233,473 248,921
Segment assets at balance date
98,843
88,429
422,140
338,141 433,013 395,960 953,996 822,530
Capital expenditure for the year
24,352
18,997 114,803
58,701
47,375
51,614 186,530 129,312
2. REVENUE AND OTHER INCOME
Accounting Policies
Gold sales
The Group adopted AASB 15 – Revenue from contracts with customers for the first time for the annual reporting period
commencing 1 July 2018. Revenue is generated from the sale of gold bullion and gold. Under AASB 15, revenue is
recognised when control is transferred to the customer which replaced the notion of transfer risks and rewards in AASB
118 – Revenue (superseded on 1 July 2018). The Group applied the new standard AASB 15 using the cumulative effect
approach which recognises the cumulative effect of initial application as an adjustment to the opening balance of Retained
Earnings at 1 July 2018, without having to adjust comparatives in the current year reporting.
The impact on the consolidated financial statement upon the adoption of AASB 15 from 1 July 2018 under the cumulative
effect approach is as following:
Gold bullion sales – gold sales that occurred in June 2018 met the revenue recognition criteria under the prevailing AASB
118 and was correctly recognised in the prior year. The same sale however would not have met the recognition criteria under
AASB 15. Therefore, upon adoption of AASB 15, the standard requires an adjustment of $5,046,000 to the opening Retained
Earnings of the current year and a recognition of that sale in the current year which results in the below impacts on the
Consolidated Statement of Comprehensive Income for the year ended 30 June 2019.
REGIS RESOURCES | NOTES TO THE FINANCIAL STATEMENTS (continued) Extract of the Consolidated Statement of Comprehensive
Income for the year ended 30 June 2019
UNDER AASB 15
(AS REPORTED)
UNDER AASB 118
IMPACT OF ADOPTION
INCREASE/(DECREASE)
59
Revenue
Gross profit
Profit before income tax
Net profit
Interest
$’000
$’000
652,450
252,837
233,473
163,149
631,291
245,628
226,264
158,103
$’000
21,159
7,209
7,209
5,046
Interest income is recognised as it accrues using the effective interest method.
Revenue
Gold sales
Interest
CONSOLIDATED
2019
$’000
2018
$’000
652,450
604,425
2,357
2,070
654,807
606,495
Gold forward contracts
As part of the risk management policy, the Group has entered 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)
2019
2018
ounces
ounces
2019
$/oz
2018
2019
2018
2019
2018
$/oz
$’000
$’000
$’000
$’000
Within one year
- Spot deferred contracts(ii)
426,514
388,711
1,598
1,555
681,466
604,635
(175,578)
(54,151)
- Spot
25,000
-
1,830
-
45,750
-
(4,485)
-
451,514
388,711
727,216
604,635
(180,063)
(54,151)
Mark-to-market has been calculated with reference to the following spot price at period end
$2,009/oz $1,693/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 $1,425/oz to $1,878/oz (2018: $1,416/oz to $1,821/oz).
REGIS RESOURCES | 2019 ANNUAL REPORT 60
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
Exploration rent refunds
CONSOLIDATED
2019
$’000
2,976
1,366
-
17
20
2018
$’000
2,165
1,299
(72)
4
-
4,379
3,396
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 25,000 ounces with a weighted
average exercise price of $1,809/oz (2018: 20,000 ounces at A$1,684/oz).
3. EXPENSES
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
2019
$’000
2018
$’000
299,621
252,948
28,447
26,325
31,014
29,703
42,888
34,609
401,970
343,585
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 and exploration and evaluation assets is charged to the statement
of comprehensive income 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.
REGIS RESOURCES | NOTES TO THE FINANCIAL STATEMENTS (continued) 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.
61
Depreciation and amortisation
Depreciation expense
Amortisation expense
Less: Amounts capitalised
CONSOLIDATED
2019
$’000
2018
$’000
31,543
29,968
42,889
34,609
(209)
(140)
Depreciation and amortisation charged to the statement of comprehensive income
74,223
64,437
KEY ESTIMATES AND ASSUMPTIONS
Unit-of-production method of depreciation/amortisation
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
NOTE
23
CONSOLIDATED
2019
$’000
2018
$’000
42,192
38,750
3,871
1,082
1,424
4,212
3,569
3,231
1,473
3,966
52,781
50,989
(7,183)
(6,047)
Employee benefits expense recognised in the statement of comprehensive income
45,598
44,942
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
Non-capital exploration expenditure
Loss on disposal of assets
766
(230)
536
885
55
940
384
(115)
269
867
144
1,011
REGIS RESOURCES | 2019 ANNUAL REPORT 62
4. EARNINGS PER SHARE
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
163,150
174,231
CONSOLIDATED
2019
$’000
2018
$’000
Weighted average number of shares
Issued ordinary shares at 1 July
Effect of shares issued
Weighted average number of ordinary shares at 30 June
Effect of dilution:
Share options
Performance rights
NO. SHARES
NO. SHARES
(‘000s)
(‘000s)
504,438
501,020
2,574
2,597
507,012
503,617
335
559
2,885
692
Weighted average number of ordinary shares adjusted for the effect of dilution
507,906
507,194
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
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.
63
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
CONSOLIDATED
2019
$’000
2018
$’000
53,631
47,054
486
1,862
16,743
(537)
28,749
(2,975)
Income tax expense reported in the statement of comprehensive income
70,323
74,690
Deferred tax payable/(receivable) related to items recognised in OCI
during the year
Net (loss)/gain on revaluation of cash flow hedges
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% (2018: 30%)
Share-based payments
Other non-deductible items
Adjustment in respect of income tax of previous years
Deductible equity raising costs
-
-
(78)
(78)
233,473
248,921
70,042
74,676
325
10
(52)
(2)
969
158
(1,113)
-
Income tax expense reported in the statement of comprehensive income
70,323
74,690
REGIS RESOURCES | 2019 ANNUAL REPORT 64
6. DIVIDENDS
Declared and paid during the year:
Dividends on ordinary shares
CONSOLIDATED
2019
$’000
2018
$’000
Final dividend for 2018: 8 cents per share (2017: 8 cents per share)
40,570
40,312
Interim franked dividend for 2019: 8 cents per share (2018: 8 cents per share)
40,626
40,347
81,196
80,659
Proposed by the directors after balance date but not recognised
as a liability at 30 June:
Dividends on ordinary shares
Final dividend for 2019: 8 cents per share (2018: 8 cents per share)
40,650
40,389
Dividend franking account
Amount of franking credits available to shareholders of Regis Resources Limited for
subsequent financial years
37,129
19,974
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. Cash at bank earns interest at floating
rates based on daily bank deposit rates.
At 30 June 2019, the Group had no undrawn, committed borrowing facilities available (2018: nil). Refer to note 18.
Cash and cash equivalents in the balance sheet and cash flow statement
Cash at bank and on hand
CONSOLIDATED
2019
$’000
2018
$’000
188,697
181,118
188,697
181,118
REGIS RESOURCES | NOTES TO THE FINANCIAL STATEMENTS (continued) Restrictions on cash
The Group is required to maintain $501,000 (2018: $203,000) on deposit to secure bank guarantees in relation to the Perth
office leases and two new office leases in NSW. The amount will be held for the term of the lease.
65
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
Rent refunds
Share-based payments
Rehabilitation provision adjustment
Depreciation and amortisation
Adjustment on adoption AASB 15
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
NOTES
15
18
CONSOLIDATED
2019
$’000
2018
$’000
163,150
174,231
6,729
1,362
55
-
(20)
353
1,204
144
(30)
-
1,082
3,231
(2,976)
(2,165)
74,223
64,437
(5,046)
-
21,160
3,775
(774)
45
(17,831)
(13,476)
(843)
(119)
(2,018)
12,049
21,527
(9,289)
16,207
25,772
(502)
(435)
275,485
259,727
REGIS RESOURCES | 2019 ANNUAL REPORT 66
O P E R A T I N G A S S E T S A N D L I A B I L I T I E S
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 76.
8. GOLD BULLION AWAITING SETTLEMENT
Accounting Policy
Bullion awaiting settlement comprises gold that has been received by the refiner prior to period end but which has not
yet been delivered into a sale contract. Bullion awaiting settlement is initially recognised at the expected selling price and
adjustments for variations in the gold price are made at the time of final settlement.
Due to the short-term nature of the bullion awaiting settlement, the carrying value is assumed to approximate fair value.
The maximum exposure to credit risk is the fair value.
Current
Gold bullion awaiting settlement
CONSOLIDATED
2019
$’000
2018
$’000
-
21,160
As of 30 June 2019 there were no gold bullion awaiting settlement (2018: 12,447 ounces at $1,700/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 deposits for land acquisition
Interest receivable
Dividend trust account
Other receivables
CONSOLIDATED
2019
$’000
4,067
1,807
906
170
490
234
2018
$’000
3,447
1,637
-
201
441
228
7,674
5,954
REGIS RESOURCES | NOTES TO THE FINANCIAL STATEMENTS (continued) 67
10. INVENTORIES
Accounting Policy
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
2019
$’000
2018
$’000
31,696
26,394
11,201
9,830
3,350
9,123
4,263
3,658
56,077
43,438
55,898
45,986
At 30 June 2018, there was no expense recognised in costs of goods sold for inventories carried at net realisable value.
At 30 June 2019, a portion of ore stockpiles were reclassified as non-current as a result of the annual update of life of mine
plans and written down to net realisable value resulting in an expense totalling $438,000 being recognised in cost of goods
sold. During the year, all other inventories were carried at cost except for a portion of Erlistoun ore stockpiles written down
to net realisable value resulting in an expense totalling $216,000 being recognised in cost of goods sold (2018: all inventory
is carried at cost).
KEY ESTIMATES AND ASSUMPTIONS
Inventories
Net realisable value tests are performed at each reporting date and represent the estimated forecast sales price of
the gold when its expected to be realised, 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 | 2019 ANNUAL REPORT 68
11. PROPERTY, PLANT AND EQUIPMENT
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.
CONSOLIDATED
FREEHOLD
LAND
LEASEHOLD
IMPROVEMENTS
PLANT &
EQUIPMENT
FURNITURE &
EQUIPMENT
BUILDINGS &
INFRASTRUCTURE
CAPITAL
WIP
TOTAL
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Net carrying amount at 1 July 2018
33,752
Additions
11,292
227
753
94,974
11,370
824
323
52,122
13,441
195,340
7,091
26,632
57,461
Depreciation expense
Transfers to mine properties
Transfers between classes
Rehabilitation provision adjustments
Disposals
-
-
-
-
-
(240)
(18,009)
(295)
(12,999)
-
338
-
-
-
518
5,019
(86)
-
218
-
-
-
-
(31,543)
-
(19)
-
11,469 (12,562)
16,816
-
-
-
21,835
(86)
Net carrying amount at 30 June 2019
45,044
1,078
93,786
1,070
74,499
27,511
242,988
At 30 June 2019
Cost
45,044
1,853
260,080
2,755
147,902
27,511
485,145
Accumulated depreciation
-
(775)
(166,294)
(1,685)
(73,403)
-
(242,157)
Net carrying amount
45,044
1,078
93,786
1,070
74,499
27,511
242,988
Net carrying amount at 1 July 2017
16,488
303
104,224
Additions
17,264
-
8,496
600
249
52,288
8,485
182,388
3,171
11,629
40,809
Depreciation expense
Transfers to mine properties
Transfers between classes
Rehabilitation provision adjustments
Disposals
-
-
-
-
-
(76)
(18,705)
(194)
(10,993)
-
(29,968)
-
-
-
-
-
1,180
(29)
(192)
-
169
-
-
-
(26)
(26)
5,298
(6,647)
-
2,358
-
-
-
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
REGIS RESOURCES | NOTES TO THE FINANCIAL STATEMENTS (continued) 69
12. EXPLORATION AND EVALUATION ASSETS
Accounting Policy
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
NOTES
CONSOLIDATED
2019
$’000
2018
$’000
171,570
151,735
34,758
33,444
-
(6,729)
50
(353)
(13,851)
(12,918)
-
(388)
185,748
171,570
15
13
14
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
14,560
9,118
25,043
27,323
5,961
5,466
13,656
13,610
126,528
116,053
185,748
171,570
REGIS RESOURCES | 2019 ANNUAL REPORT 70
KEY ESTIMATES AND ASSUMPTIONS
Impairment of exploration and evaluation assets
The future recoverability of capitalised exploration and evaluation expenditure is dependent upon a number of factors, including
whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and
evaluation asset through sale.
Factors that could impact future recoverability include the level of reserves and resources, future technological changes
which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and
changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, profits
and net assets will be reduced in the period in which the determination is made.
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
2019
$’000
2018
$’000
2,819
1,668
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) 71
13. MINE PROPERTIES UNDER DEVELOPMENT
Accounting Policy
Mine properties under development represents the costs incurred in preparing mines for production and includes plant and
equipment under construction and operating costs incurred before production commences. These costs are capitalised
to the extent they are expected to be recouped through the successful exploitation of the related mining leases. Once
production commences, these costs are transferred to property, plant and equipment and mine properties, as relevant, and
are depreciated and amortised using the units-of-production method based on the estimated economically recoverable
reserves to which they relate or are written off if the mine property is abandoned.
NOTE
12
14
CONSOLIDATED
2019
$’000
29,578
34,604
13,851
(4,720)
(29,150)
2018
$’000
-
17,831
12,918
(1,168)
(3)
44,163
29,578
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 | 2019 ANNUAL REPORT 72
CONSOLIDATED
PRODUCTION
STRIPPING
COSTS
PRE-STRIP
COSTS
OTHER MINE
PROPERTIES
$’000
$’000
$’000
TOTAL
$’000
Net carrying amount at 1 July 2018
60,917
36,358
26,841
124,116
Additions
16,197
43,510
Transfers from exploration and evaluation assets
-
-
-
-
59,707
-
Transfers from pre-production
1,271
18,530
9,349
29,150
Rehabilitation provision adjustment
-
-
(2,371)
(2,371)
Amortisation expense
(17,712)
(16,318)
(8,859)
(42,889)
Net carrying amount at 30 June 2019
60,673
82,080
24,960
167,713
At 30 June 2019
Cost
Accumulated amortisation
Net carrying amount
111,218
151,990
101,277
364,485
(50,545)
(69,910)
(76,317)
(196,772)
60,673
82,080
24,960
167,713
Net carrying amount at 1 July 2017
41,887
40,819
40,538
123,244
Additions
30,188
7,796
Transfers from exploration and evaluation assets
Transfers from pre-production
Rehabilitation provision adjustment
-
-
-
-
-
-
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
93,751
89,950
94,300
278,001
Accumulated amortisation
(32,834)
(53,592)
(67,459)
(153,885)
Net carrying amount
At 30 June 2017
Cost
Accumulated amortisation
Net carrying amount
KEY ESTIMATES AND ASSUMPTIONS
Production stripping costs
60,917
36,358
26,841
124,116
63,563
82,154
96,803
242,520
(21,676)
(41,335)
(56,265)
(119,276)
41,887
40,819
40,538
123,244
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) 73
15. IMPAIRMENT OF NON-FINANCIAL ASSETS
Accounting policy
At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an
indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of
an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.
The recoverable amount of other assets is the greater of their fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. For an asset that does not
generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which
the asset belongs.
Impairment losses are reversed when there is an indication that the impairment loss may no longer exist and there has
been a change in the estimate used to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised.
Total impairment losses recognised in the statement of comprehensive income for the year were as follows:
Exploration and evaluation assets
Exploration and evaluation assets
NOTE
12
CONSOLIDATED
2019
$’000
6,729
2018
$’000
353
An impairment loss of $3,000 (2018: $353,000) has been recognised in relation to tenements that were surrendered,
relinquished or expired during the year.
An impairment loss of $3,932,000 was recognised for the number of tenements relating to the Duketon Gold Project
satellite deposits and Regional WA exploration. Limited work is planned to be undertaken subsequent to year end and as
such, all costs incurred have been written off in the current year. There were no other indicators of impairment identified.
An impairment loss of $2,794,000 was recognised for the Garden Well mining tenements relating to Duketon South
Operations. Exploration and evaluation costs of exploration programmes completed over the period up to 30 June 2017
were impaired where the Group has no immediate plans to incur substantive expenditure on further exploration activity.
Since 30 June 2017 further exploration and evaluation costs continue to prove underground potential.
KEY JUDGEMENTS
Determination of mineral resources and ore reserves
The determination of mineral resources and ore reserves impacts the accounting for asset carrying values. The Group
estimates its mineral resources and ore reserves in accordance with the Australian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves 2012 (the “JORC” Code). The information on mineral resources and ore reserves was
prepared by or under the supervision of Competent Persons as defined in the JORC Code. The amounts presented are based
on the mineral resources and ore reserves determined under the JORC Code.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves, and assumptions that are valid at
the time of estimation may change significantly when new information becomes available.
Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic
status of reserves and may ultimately result in reserves being restated.
REGIS RESOURCES | 2019 ANNUAL REPORT 74
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.
Employee entitlements
A liability is recognised for the amount expected to be paid to an employee for annual leave they are presently entitled to
as a result of past service. The liability includes allowances for on-costs such as superannuation and payroll taxes, as well
as any future salary and wage increases that the employee may be reasonably entitled to.
Current
Trade payables
Accrued expenses
Employee entitlements – annual leave payable
Other payables
17. PROVISIONS
Accounting Policies
CONSOLIDATED
2019
$’000
2018
$’000
28,716
21,075
26,310
15,756
3,547
9,040
3,329
8,475
67,613
48,635
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
75
CONSOLIDATED
2019
$’000
490
158
2,831
3,479
2018
$’000
440
150
2,828
3,418
2,166
1,737
58,625
41,716
60,791
43,453
44,544
47,631
11,211
(939)
5,278
1,362
3,910
(1,145)
(7,056)
1,204
61,456
44,544
Nature and purpose of provision for rehabilitation
The nature of rehabilitation activities includes dismantling and removing structures, rehabilitating mines, dismantling
operating facilities, closure of plant and waste sites and restoration, reclamation and re-vegetation of affected areas.
Typically, the obligation arises when the asset is installed at the production location.
KEY ESTIMATES AND ASSUMPTIONS
Rehabilitation obligations
The Group assesses site rehabilitation liabilities annually. The provision recognised is based on an assessment of the
estimated cost of closure and reclamation of the areas using internal information concerning environmental issues in the
exploration and previously mined areas, together with input from various environmental consultants, discounted to present
value. Significant estimation is required in determining the provision for site rehabilitation as there are many factors that
may affect the timing and ultimate cost to rehabilitate sites where mining and/or exploration activities have previously taken
place. These factors include future development/exploration activity, changes in the cost of goods and services required for
restoration activity and changes to the legal and regulatory framework. These factors may result in future actual expenditure
differing from the amounts currently provided.
REGIS RESOURCES | 2019 ANNUAL REPORT 76
C A P I T A L S T R U C T U R E , F I N A N C I A L I N S T R U M E N T S A N D R I S K
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.
18. NET DEBT AND FINANCE COSTS
Accounting Policies
Finance Leases – Group as a lessee
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership for the lease
item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of
the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease
liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised
as an expense in profit or loss.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term if
there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.
The carrying amounts of the Group’s current and non-current borrowings approximate their fair value.
Current interest-bearing liabilities
Finance lease liability
Non-current interest-bearing liabilities
Finance lease liability
NOTE
CONSOLIDATED
2019
$’000
2018
$’000
793
806
1,328
36
Less: cash and cash equivalents
7
188,697
181,118
Net cash
186,576
180,276
REGIS RESOURCES | NOTES TO THE FINANCIAL STATEMENTS (continued) Interest-bearing liabilities
Finance lease commitments
The Group has hire purchase contracts for two 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.
77
Finance costs
Interest expense
Unwinding of discount on provisions
Borrowing costs
CONSOLIDATED
2019
$’000
85
1,362
1,447
2018
$’000
69
1,204
1,273
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (i.e. an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale) are capitalised as part of the cost of
that asset. All other borrowing costs are expensed as part of finance costs in the period incurred. Borrowing costs consist
of interest and other costs that an entity incurs in connection with the borrowing of funds.
Unwinding of discount on provisions
The unwinding of discount on provisions represents the cost associated with the passage of time. Rehabilitation provisions
are recognised at the discounted value of the present obligation to restore, dismantle and rehabilitate each mine site with
the increase in the provision due to the passage of time being recognised as a finance cost in accordance with the policy
described in note 17.
19. FINANCIAL ASSETS
Accounting Policy
Financial assets are initially recognised at fair value, plus transaction costs that are directly attributable to its acquisition
and subsequently measured at amortised costs or fair value depending on the business model for those assets and the
contractual cash flow characteristics.
Equity instruments
Equity instruments are normally measured at fair value through profit or loss (“FVTPL”) unless the Group chooses, on
an instrument-by-instrument basis on initial recognition, to present fair value changes in other comprehensive income
(“FVOCI”). This option is irrevocable and only applies to equity instruments which are neither held for trading nor are
contingent consideration in a business combination. Gains and losses on equity instruments measured at FVOCI are not
recycled through profit and loss or disposal and there is no impairment accounting. All gains and losses are recorded in
equity through other comprehensive income.
Current
Financial assets at amortised cost – term deposit
269
344
CONSOLIDATED
2019
$’000
2018
$’000
REGIS RESOURCES | 2019 ANNUAL REPORT 78
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 foreign currency risk, interest rate risk and commodity price risk
This note presents information about the Group’s exposure to each of the above risks and its objectives, policies and
processes for measuring and managing risk. These risks affect the fair value measurements applied by the Group. Further
quantitative disclosures are included throughout this financial report.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
The Audit and Risk Management Committee is responsible for developing and monitoring risk management policies. The
committee reports regularly to the Board of Directors on its activities.
Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits
and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly
to reflect changes in market conditions and the Group’s activities. The Group, through its training and management
standards and procedures, aims to develop a disciplined and constructive control environment in which all employees
understand their roles and obligations.
The Group’s Audit and Risk Management Committee oversees how management monitors compliance with the Group’s
risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the
risks faced by the Group.
Credit Risk
Credit risk is the risk of financial loss to the Group if the counterparty to a financial asset fails to meet its contractual
obligation. Credit risk arises from cash and cash equivalents and gold bullion awaiting settlement. The Group has adopted
the policy of dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. Cash
holdings are with Commonwealth Bank of Australia and Macquarie Bank Limited, Australian banks regulated by APRA
with a short term S&P rating of A-1+ and A-1 respectively. The Group has determined that it currently has no significant
exposure to credit risk as at reporting date given banks have investment grade credit ratings.
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet liabilities
when due, under both normal and stressed conditions, without incurring unacceptable losses or risk damage to the
Group’s reputation.
The Group uses weekly and monthly cash forecasting to monitor cash flow requirements. Typically, the Group ensures that
it has sufficient cash on demand to meet expected operational expenses, including the servicing of financial obligations; this
excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.
The following table analyses the Group’s financial liabilities, including net and gross settled financial instruments, into
relevant maturity periods based on the remaining period at the reporting date to the contractual maturity date. The
amounts disclosed in the table are the contractual undiscounted cash flows and hence will not necessarily reconcile with
the amounts disclosed in the balance sheet.
For derivative liabilities (sold gold call options), the amounts disclosed are the net amounts that would need to be paid if
the option expired out of the money. Due to their short term nature, the amounts have been estimated using the gold spot
price applicable at reporting date.
REGIS RESOURCES | NOTES TO THE FINANCIAL STATEMENTS (continued) 79
30 JUNE 2019
($’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
64,066
(64,066)
(64,066)
-
-
Finance leases
2,121
(2,231)
(447)
(412)
(1,372)
Total
66,187
(66,297)
(64,513)
(412)
(1,372)
-
-
-
-
-
-
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)
-
-
-
-
-
-
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 2019, the Group did not have any financial guarantee liabilities (2018: Nil).
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, commodity prices and
equity prices will affect the Group’s income or value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Foreign currency risk: The Group is occasionally exposed to foreign currency risk when long lead items are purchased in a
currency other than Australian dollars. The Group maintains all of its cash in Australian dollars and does not currently hedge
these purchases. There is no significant exposure to foreign currency risk at reporting date.
Interest rate risk: 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.
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
2019
$’000
269
(2,121)
(1,852)
2018
$’000
344
(842)
(498)
188,585
180,854
REGIS RESOURCES | 2019 ANNUAL REPORT 80
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore,
a change at reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable rate instruments
A sensitivity analysis has not been disclosed in relation to the variable interest rate cash on deposit and secured bank loan
as the results have been determined to be immaterial to the statement of comprehensive income for both the current and
prior financial years.
Fair Values
The carrying amounts and estimated fair values of all of the Group’s financial instruments recognised in the financial
statements are materially the same. The methods and assumptions used to estimate the fair value of the financial
instruments are disclosed in the respective notes.
Valuation of financial instruments
For all fair value measurements and disclosures, the Group uses the following to categorise the method used:
Level 1: the fair value is calculated using quoted prices in active markets.
Level 2: the fair value is estimated using inputs other than quoted prices included in Level 1, that are observable for the asset
or liability, either directly (as prices) or indirectly (derived from prices). The Group’s derivative liabilities (sold gold call options)
and derivative assets (cash flow hedges) are classified as Level 2, as they were valued using valuation techniques that employ
the use of market observable inputs. The most frequently applied valuation techniques include forward pricing and swap
models using present value calculations. The models incorporate various inputs including the credit quality of counterparties,
foreign exchange spot and forward rates, and spot and forward rate curves of the underlying commodity. The changes in
counterparty credit risk had no material effect on the hedge effectiveness assessment for the commodity swaps designated
in hedge relationships and the sold gold call options recognised at fair value.
Level 3: the fair value is estimated using inputs for the asset or liability that are not based on observable market data. The
Group does not have any financial assets or liabilities in this category.
For financial instruments that are carried at fair value on a recurring basis, the Group determines whether transfers have
occurred between Levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant
to the fair value measurement as a whole) at the end of each reporting period. There were no transfers between levels
during the year.
REGIS RESOURCES | NOTES TO THE FINANCIAL STATEMENTS (continued) 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.
81
CONSOLIDATED
2019
$’000
2018
$’000
Ordinary shares – issued and fully paid
434,880
433,248
Movement in ordinary shares on issue
At 1 July 2017
Issued on exercise of options
Transaction costs
At 30 June 2018
Issued on exercise of options
Transaction costs
At 30 June 2019
NO. SHARES
(‘000s)
$’000
501,020
431,491
3,418
-
1,810
(53)
504,438
433,248
3,431
-
1,697
(65)
507,869
434,880
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.
SHARE-BASED
PAYMENT
RESERVE
FINANCIAL
ASSETS
RESERVE
CASH FLOW
HEDGE
RESERVE
TOTAL
RESERVES
Balance at 1 July 2017
Net gain on financial instruments recognised in equity
Tax effect of transfers and revaluations
Share-based payment transactions
$’000
25,049
-
-
3,231
$’000
1,717
-
-
-
Balance at 30 June 2018 and 1 July 2018
28,280
1,717
Net gain on financial instruments recognised in equity
Tax effect of transfers and revaluations
Share-based payment transactions
-
-
1,082
-
-
-
Balance at 30 June 2019
29,362
1,717
$’000
110
(188)
78
-
-
-
-
-
-
$’000
26,876
(188)
78
3,231
29,997
-
-
1,082
31,079
REGIS RESOURCES | 2019 ANNUAL REPORT 82
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.
O T H E R D I S C L O S U R E S
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 2019 there are no unrecognised temporary differences associated with the
Group’s investment in subsidiaries (2018: $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.
Deferred income tax at 30 June relates to the following:
Deferred tax liabilities
Receivables
Inventories
Prepayments
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
CONSOLIDATED
2019
$’000
542
1,377
140
21,620
33,057
9,599
51,394
117,729
2018
$’000
3,219
4,594
111
14,199
28,615
8,873
37,235
96,846
(26,424)
(21,748)
91,305
75,098
REGIS RESOURCES | NOTES TO THE FINANCIAL STATEMENTS (continued) Deferred tax assets
Trade and other payables
Provisions
Expenses deductible over time
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
83
CONSOLIDATED
2019
$’000
1,421
19,134
3
5,866
26,424
2018
$’000
1,114
13,929
3
6,702
21,748
(26,424)
(21,748)
-
-
(75,098)
(49,403)
(16,207)
(25,773)
-
78
Closing balance at 30 June – net deferred tax (liabilities)/ assets
(91,305)
(75,098)
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.
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.
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.
REGIS RESOURCES | 2019 ANNUAL REPORT 84
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
2019
$’000
1,037
45
1,082
2018
$’000
2,575
656
3,231
There have been no cancellations or modifications to any of the plans during the current or prior years.
Employee share option plan (ESOP)
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:
2019
2018
NO.
WAEP
NO.
WAEP
Outstanding at the beginning of the year
5,822,500
$2.1480
9,445,000
$1.5274
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
-
-
1,790,000
$3.9000
(200,000)
$3.9000
(747,500)
$2.3632
(3,997,500)
$1.4325
(4,665,000)
$1.5294
-
-
-
-
Outstanding at the end of the year
1,625,000
$3.6923
5,822,500
$2.1480
Exercisable at the end of the year
135,000
-
70,000
$1.4000
REGIS RESOURCES | NOTES TO THE FINANCIAL STATEMENTS (continued) Weighted average share price at the date of exercise
Weighted average remaining contractual life
Range of exercise prices
85
2019
$4.25
2018
$4.19
1.8 years
1.7 years
$1.40 - $3.90 $1.40 - $3.90
Weighted average fair value of options granted during the year
n/a
$1.5709
Option pricing model
The fair value of the equity-settled share options granted under the ESOP is estimated as at the date of grant using a Black-
Scholes option pricing model taking into account the terms and conditions upon which the options were granted. There
were no new grants of employee options during the year ended 30 June 2019. The following table lists the inputs to the
model used for the year ended 30 June 2018:
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Expected life of the option (years)
Option exercise price ($)
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.
Performance Rights
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 Kim Massey resigned on 1 July 2019 and 71,625 performance rights granted to Mr Massey lapsed upon the date of the
resignation in accordance with the terms and conditions.
Mr Mark Clark retired on 23 November 2018 and 173,554 performance rights granted to Mr Clark lapsed upon the date of
the retirement in accordance with the terms and conditions.
Mr Peter Woodman resigned on 29 March 2018 and 71,625 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.
REGIS RESOURCES | 2019 ANNUAL REPORT 86
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
$4.09
nil
4.00%
1.90%
50%
3
$4.09
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)
1
1
The weighted average fair value of the Performance Rights granted during the year was $2.98.
In November 2018, 373,924 performance rights were granted to the executive directors Mr Jim Beyer and Mr Paul Thomas,
and other executives, Mr Kim Massey under the Group’s Executive Incentive Plan (“EIP”).
Mr Kim Massey resigned on 1 July 2019 and 83,971 performance rights granted to Mr Massey 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
20% of the Performance Rights
The Company’s relative total shareholder return (“TSR”) measured against
the TSR’s of 10 comparator mining companies
Tranche B
20% of the Performance Rights
The Company’s absolute TSR measured against specific thresholds
Tranche C
15% of the Performance Rights
The growth in the Company’s earnings per share (“EPS”) measured against
specific thresholds
Tranche D
15% of the Performance Rights
The growth in the Company’s Ore Reserve measured against
specific thresholds
Tranche E
15% of the Performance Rights
McPhillamys progress against timetable and budget including permitting
and scheduling
Tranche F
15% of the Performance Rights
Rosemont Underground against specific performance requirements
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, D, E and F, which have non-market based
performance conditions.
REGIS RESOURCES | NOTES TO THE FINANCIAL STATEMENTS (continued) 87
The table below details the terms and conditions of the grant and the assumptions used in estimating fair value:
ITEM
Grant date
TRANCHE A & B
TRANCHE C & D
TRANCHE E & F
23 November 2018
23 November 2018
23 November 2018
Value of the underlying security at grant date
Exercise price
Dividend yield
Risk free rate
Volatility
Performance period (years)
$4.34
nil
4.30%
2.11%
35%
3
$4.34
nil
4.30%
2.11%
35%
3
$4.34
nil
4.30%
2.11%
35%
3
Commencement of measurement period
1 July 2018
1 July 2018
1 July 2018
Test date
30 June 2021
30 June 2021
30 June 2021
Remaining performance period (years)
2
2
2
The fair value of the Performance Rights granted during the year was $992,0000 and the weighted average fair value was
$2.65.
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.
24. RELATED PARTIES
Key management personnel compensation
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
2019
$
2018
$
3,337,291
3,100,580
194,359
157,062
239,104
190,062
-
5,619
91,184
1,391,477
3,861,938
4,844,800
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.
REGIS RESOURCES | 2019 ANNUAL REPORT
88
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
COUNTRY OF
INCORPORATION
Australia
Australia
Rosemont Gold Mines Pty Ltd
Australia
LFB Resources NL
Greenflow Pty Ltd
Australia
Australia
% EQUITY INTEREST
INVESTMENT $’000
2019
2018
2019
2018
100%
100%
100%
100%
-
100%
100%
100%
100%
100%
30,575
30,575
-
-
-
-
73,941
44,110
-
-
104,516
74,685
Ultimate parent
Regis Resources Limited is the ultimate Australian parent entity and the ultimate parent entity of the Group.
Transactions with related parties
A loan is made by the Company to Duketon Resources and represents the subsidiary’s share of payments for exploration
and evaluation expenditure on commercial joint ventures existing between the Company and Duketon Resources. The loan
outstanding between the Company and Duketon Resources has no fixed date of repayment and is non-interest-bearing.
As at 30 June 2019, the balance of the loan receivable was $26,392,000 (2018: $25,971,000).
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 2019, the balance of the loan receivable was $83,667,000 (2018: $63,945,000).
Transactions with key management personnel
For the year ended 30 June 2019, services totalling $453,384 (2018: $645,073) 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 2019 was $5,986.25, 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.
REGIS RESOURCES | NOTES TO THE FINANCIAL STATEMENTS (continued) 25. PARENT ENTITY INFORMATION
The following details information related to the parent entity, Regis Resources Limited, at 30 June 2019. The information
presented here has been prepared using consistent accounting policies as detailed in the relevant notes of this report.
89
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
2019
$’000
2018
$’000
253,503
252,892
708,809
585,459
962,312
838,351
84,093
66,865
125,402
101,674
209,495
168,539
434,880
433,248
31,079
29,997
286,858
206,567
752,817
669,812
169,647
174,396
-
(110)
169,647
174,286
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 2019 as disclosed at note 27.
All commitments are commitments incurred by the parent entity, except for $1,297,000 (2018: $744,000) of the exploration
expenditure commitments disclosed at note 12, and $107,000 (2018: $201,000) of the operating lease commitments
disclosed at note 26.
REGIS RESOURCES | 2019 ANNUAL REPORT 90
26. COMMITMENTS
Operating lease commitments – Group as lessee
The Group leases office premises in Perth, WA and Blayney, NSW under normal commercial lease arrangements. The
Perth office lease was entered into for an initial period of 5 years beginning 1 May 2010 and was renewed for a further 5
year period in 2016. On 1 June 2018, the Group signed a new lease contract for its Perth office for an initial period of 3
years. The previous Perth office has been sublet from 1 November 2018. Two office leases were entered into for Blayney,
NSW, for an initial period of 3 years each, effective from 1 November 2017.
The Group is under no legal obligation to renew the lease once the extended lease term has expired. All office lease
arrangements will qualify as a lease under the new accounting standard, AASB 16 Leases, disclosed at note 30.
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
2019
$’000
956
557
1,513
2018
$’000
1,027
1,529
2,556
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 4
July 2019 and 28 February 2022 and ownership of the loaders passes to the Group once all contractual payments have
been made. (30 June 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
2019
$’000
860
1,372
2,232
(111)
2,121
793
1,328
2,121
2018
$’000
821
36
857
(15)
842
806
36
842
Carrying value of leased assets included in plant and equipment
11
2,879
1,132
REGIS RESOURCES | NOTES TO THE FINANCIAL STATEMENTS (continued) 91
Contractual commitments
On 19 January 2010, the Group entered into an agreement with Pacific Energy (KPS) Pty Ltd (“KPS”) for the supply of
electricity to the Moolart Well Gold Mine. The terms of this agreement commit the Group to purchasing a fixed amount of
electricity per month for six years from 7 July 2010 (the “Effective Date”) at a price which will be reviewed annually. The
agreement has been renewed for further 4 years, effective 1 September 2017. As at 30 June 2019, at the current contract
price, the Group had commitments to purchase electricity for the remaining term of $1,888,000 (30 June 2018: $3,507,000).
On 23 June 2011, the Group entered into an agreement with Pacific Energy (KPS) Pty Ltd (“KPS”) for the supply of
electricity to the Garden Well Gold Mine. The terms of this agreement commit the Group to purchasing a fixed amount of
electricity per month for 5 years from 1 September 2012 (the “Effective Date”) at a price which will be reviewed annually.
The agreement was amended, effective 1 October 2013, to incorporate Rosemont Gold Mine’s power requirements. On
1 September 2017, the agreement was renewed for a further 5 years. As at 30 June 2019, at the current contract price,
the Group had commitments to purchase electricity for the remaining term of $6,101,000 (30 June 2018: $11,330,000).
Both of these arrangements will qualify as a lease under the new accounting standard, AASB 16 Leases, disclosed at note 30.
27. CONTINGENCIES
As at 30 June 2019, the Group did not have any contingent assets or liabilities (30 June 2018: nil).
28. AUDITOR’S REMUNERATION
Audit services
KPMG Australia
Audit and review of financial statements
240,702
237,408
CONSOLIDATED
2019
$
2018
$
Other services
Other advisory services
Taxation compliance services
Total auditor’s remuneration
29. SUBSEQUENT EVENTS
Share issue
-
18,963
13,581
33,700
259,665
284,689
Subsequent to year end, 249,913 shares have been issued as a result of the exercise of employee options for proceeds
of $84,000.
Dividends
On 16 August 2019, the directors proposed a final dividend on ordinary shares in respect of the 2019 financial year. Refer
to note 6.
Senior Management changes
On 31 July 2019, Mr Jon Latto was appointed as the Company’s Chief Financial Officer. Mr Latto has been interim Chief
Financial Officer of the Company since 30 June 2019.
On 1 July 2019, Mr Kim Massey resigned from the position of Chief Financial Officer.
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 | 2019 ANNUAL REPORT 92
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 2018:
AASB 15 Revenue from Contract with Customers
AASB 2016-5 Amendments to Australian Accounting Standards – Classification and Measurement of Share-based Payment
Transactions
The Group had to change its accounting policies and make certain retrospective adjustments following the adoption
of AASB 15. This is disclosed in Note 2. Other amendments did not have a material impact on the Group’s financial
statements.
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 2019 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 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 re-measure 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.
The Group will adopt the new standard effective from its mandatory adoption date of 1 July 2019, applying the Modified
Retrospective Approach. Under this approach, the Group is not required to restate the comparative amounts for the year
prior to adoption.
The Group has largely completed the assessment of key contracts and arrangements that may qualify as leases under
the new standard and require recognition on the balance sheet. The Group has reviewed key service contracts including
mining services, drilling, haulage and power generation contracts. The Group expects to recognise right-of-use assets and
a corresponding lease liability of approximately $13 million to $18 million on 1 July 2019 in respect of the power generation
and office rental contracts. Details of these contracts are disclosed at note 26. Existing finance leases under AASB 117
for the Komatsu loaders will also form part of the lease liability under AASB 16 (refer to note 18). The lease assessment
and quantification of the Group’s mining contracts is ongoing and may result in an increase to the right-of-use asset and
corresponding lease liability noted above. The Group expects that the adoption of AASB 16 will not have a material impact
on net profit after tax, net assets or financial position for the year ending 30 June 2020.
The initial lease liability and corresponding right-of-use asset will be measured at the present value of the future lease
payments for the lease term. As a result, the balance sheet will show higher assets (right-of-use assets) and higher liabilities
(lease liabilities). The Group will recognise the right-of-use asset at the amount equal to the lease liability, with no impact
on retained earnings.
Operating cash flows will increase and financing cash flows decrease as repayment of the principle portion of the lease
liabilities will now be classified as cash flows from financing activities. The net increase/decrease in cash and cash
equivalents will remain the same. Depreciation of the right-of-use asset, and interest on the lease liability, will be recognised
in the statement of comprehensive income.
REGIS RESOURCES | NOTES TO THE FINANCIAL STATEMENTS (continued) 93
The Group has assessed what practical expedients are available under AASB 16 upon transition. The Group expects that
its application of practical expedients will not have a material impact on the lease liability to be recognised.
Application date of Standard:
1 January 2019
Application date for Group:
1 July 2019
AASB 2018-1 Amendments to Australian Accounting Standards – Annual Improvements 2015-2017 Cycle
The subject of the principal amendments to the Standards are set out below:
AASB 3 Business Combinations
The amendment clarifies that an entity remeasures its previously held interest in a joint operation when it obtains control
of the business.
AASB 11 Joint Arrangements
The amendment clarifies that an entity does not remeasure its previously held interest in a joint operation when it obtains
joint control of the business.
AASB 112 Income Taxes
The amendment clarifies that an entity accounts for all income tax consequences of dividend payments according to
where the entity originally recognised the past transactions or events that generated the distributable profits, i.e. in profit
or loss, other comprehensive income or equity.
AASB 123 Borrowing Costs
The amendment clarifies that an entity treats any borrowing originally made to develop a qualifying asset as part of general
borrowings when the asset is ready for its intended use or sale.
Application date of Standard:
1 January 2019
Application date for Group: 1 July 2019
AASB 2018-6 Amendments to Australian Accounting Standards – Definition of Material
The amendments clarify the definition of “material” and its application across AASB Standards and other pronouncements.
The principal amendments are to AASB 101 Presentation of Financial Statements.
Application date of Standard:
1 January 2020
Application date for Group: 1 July 2020
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
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 | 2019 ANNUAL REPORT 94
D I R E C T O R S ’
D E C L A R A T I O N
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 2019 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 2019.
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 James Mactier
Non-Executive Chairman
Perth, 16 August 2019
REGIS RESOURCES | 2019 ANNUAL REPORT I N D E P E N D E N T
A U D I T O R ’ S R E P O R T
95
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 2019 and of
its financial performance for the year ended
on that date; and
•
•
The Financial Report comprises the:
• Consolidated Balance Sheet as at 30 June 2019
• 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.
complying with Australian Accounting
Standards and the Corporations Regulations
2001.
The Group consists of Regis Resources Limited (the
Company) and the entities it controlled at the year end
or from time to time during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. 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
Professional Standards Legislation.
REGIS RESOURCES | 2019 ANNUAL REPORT
96
I N D E P E N D E N T
A U D I T O R ’ S R E P O R T
Valuation and Classification of low grade ore stockpiles
AU $55,898 (thousand)
Refer to Note 10 Inventories
The key audit matter
How the matter was addressed in our audit
Significant judgement 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 judgement is required by us in
evaluating and challenging the Group’s
assessment.
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:
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 judgements listed below
which impact the valuation and classification of ore
stockpiles:
•
•
•
•
Forecast processing costs of low grade ore
stockpiles.
The estimated 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.
o Comparing forecast processing costs to
previous actual costs, and for consistency
with management’s latest life of mine
plan.
o Comparing the estimated 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 | INDEPENDENT AUDITOR’S REPORT (continued)
I N D E P E N D E N T
A U D I T O R ’ S R E P O R T
97
Valuation of exploration and evaluation (“E&E”) assets
AU $185,748 (thousand)
Refer to Note 12 Exploration and Evaluation Assets
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 licences.
• 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:
o Interviews of key operational and finance
personnel.
o Internal management plans.
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
approximately 19% 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 commercial viable quantity of
reserves and the Group’s intention to continue
E&E activities in each area of interest as a
result.
REGIS RESOURCES | 2019 ANNUAL REPORT
98
I N D E P E N D E N T
A U D I T O R ’ S R E P O R T
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 Highlights, Chairman’s Report, Corporate, Duketon
Gold Project, Gold Exploration, Reserves & Resources and ASX Additional 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
express an audit opinion or 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 the 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 and Company's ability to continue as a going concern and whether the use of the
going concern basis of accounting is appropriate. 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 and Company 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.
REGIS RESOURCES | INDEPENDENT AUDITOR’S REPORT (continued)
I N D E P E N D E N T
A U D I T O R ’ S R E P O R T
99
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.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of Regis
Resources Limited for the year ended 30 June
2019, complies with Section 300A of the
Corporations Act 2001.
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 Directors’ report for the year ended
30 June 2019.
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
16 August 2019
REGIS RESOURCES | 2019 ANNUAL REPORT
100
A S X A D D I T I O N A L
I N F O R M A T I O N
As at 19 September 2019 the following information applied:
1. SECURITIES
(a) Fully Paid Ordinary Shares
The number of holders of fully paid ordinary shares in the Company is 9,144. 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
2,898
3,940
1,257
969
80
9,144
479
NUMBER OF
SHARES
1,380,859
10,619,791
9,584,222
24,043,948
462,551,640
508,180,460
12,803
The Company’s fully paid ordinary shares are quoted on the Australian Securities Exchange using the code RRL.
R E G I S R E S O U R C E S | A S X A D D I T I O N A L I N F O R M A T I O N
The top 20 shareholders are as follows:
NAME
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
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