Regis Resources Annual Report 2022

Plain-text annual report

Annual Report 2022 Regis Resources is a purely Australian gold miner with operations at the Duketon Gold Project and Tropicana Gold Project (30% non-operator interest) in the Goldfields of Western Australia and the McPhillamys Gold Project in the Central Western region of New South Wales. The Tropicana Gold Project is located in the Albany-Fraser Belt, approximately 330 kilometres north-east of Kalgoorlie in Western Australia. Tropicana is operated by joint venture partner AngloGold Ashanti Australia Limited and contains the Tropicana, Havana and Boston Shaker open pits and the Boston Shaker underground operation. Tropicana holds the mineral rights to approximately 2,600 square kilometres of WA exploration tenements that are held in a Joint Venture agreement between Regis (30%) and AngloGold Ashanti Australia Limited (70%). Regis Resources Limited | Annual Report 2022 1 Contents Chairman's Report Highlights Review of Operations Duketon Gold Project Tropicana Gold Project Gold Exploration Mineral Resources and Ore Reserves Directors’ Report Remuneration Report (Audited) Auditor’s Independence Declaration Financial Statements Notes to the Financial Statements Directors' Declaration Independent Auditor’s Report 4 6 10 11 13 14 22 27 39 55 56 61 97 98 ASX Additional Information 105 Leading Australian Gold Miner Creating value for our people, our communities and our shareholders by mining safely and responsibly. Regis Resources Limited (ASX: RRL) is a publicly listed Perth based gold production and exploration company. The Company is a purely Australian gold miner with operations at the Duketon Gold Project and Tropicana Gold Project (30% non- operator interest) in the Goldfields of Western Australia and the McPhillamys Gold Project in the Central Western region of New South Wales. 2 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 3 Chairman's Report We also continue to aggressively explore our substantial tenure in the Duketon Greenstone Belt where our three operating mills give us a very wide area of influence. Dear Shareholder, 2022 was a year of consolidation for Regis. Significantly, 2022 represented the first full year of ownership of our 30% interest in the Tropicana mine and we remain pleased with its performance, outlook, and strategic fit. It has delivered significant production and free cash-flow to Regis, both of which are set to increase substantially in the near term. Furthermore, exploration results at depth, reinforce our expectation that Tropicana will continue to provide these benefits for many years to come, well beyond existing reserves. At the same time, we continued to invest in our Duketon assets through open cut and underground development, plant modifications, process improvements, resource and reserve definition drilling and greenfields exploration. Whilst we had some significant operational challenges in the first half at Duketon, our team worked well to recover from these and to position for a stronger future. Our sustainability journey continued, with commitment to a solar farm at Duketon as well as other environmental mitigation and cost-saving initiatives and plans. We maintained an industry-leading safety performance and female representation in our workforce continues to be above industry average. I encourage you to read about these achievements and other progress in our 2022 Sustainability Report. Frustratingly, we are still yet to obtain regulatory On behalf of the Board, I would like to thank our approval for the development of our McPhillamys project. management team, led by Managing Director and Nonetheless, we continue to constructively engage Chief Executive Officer Jim Beyer and all our staff and with the relevant regulatory authorities, and we remain contractors, our joint venture partner AngloGold Ashanti focussed on delivering the requisite approvals. and the communities in which we operate. I would also like to thank Mr Russell Barwick for his contribution during his The direct and indirect impacts of COVID-19 continued to require a strong focus to limit the effects on our business. time on the Board. Notwithstanding our efforts and planning, the resultant We look forward to another productive and profitable year impacts on costs, workforce availability and logistical ahead, mining safely and responsibly. constraints, made for a very challenging operating environment. More recently, a surging diesel price added Thank you. to these industry-wide pressures and in combination with a softening of the USD gold price, resulted in a very significant downward rating of gold sector valuations globally. Whilst our share price performance was very disappointing, largely because of these sector-wide concerns, our underlying business continues to strengthen. We expect production, cashflow and earnings to grow, realising the benefits of our investments over the past few years. Our balance sheet remains robust and conservatively geared and our hedged ounces have reduced significantly. James Mactier Non-Executive Chairman 4 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 5 Highlights Corporate Operations Net profit after tax of $14m after non-cash adjustments of $60 million EBITDA of $336m with an EBITDA margin of 33% Cash and Bullion of $231m1 at 30 June 2022 Fully franked dividends of 2 cents per share for FY2022 Further reduction of hedge book with 77% of gold sold at spot price 1 Includes bullion on hand valued at $2,637 per ounce Record gold production of 437,309 ounces at AISC of $1,556 per ounce Improvement in safety performance Lost Time Injury Frequency Rate (LTIFR) reduced to 1.3 more than 40% below industry average Strong operating cashflow of $347m Forth largest gold producer on the ASX Exploration & Growth First full year of Tropicana Gold Project (30% interest) Reserve Life of more than 9 years Targeting 500,000 ounces by FY2025 Mineral Resources of 9.9m ounces Two current reliable cash generating pillars Ore Reserves of 4.1m ounces 6 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 7 Corporate Regis delivered a record year of gold production in FY2022 generating EBITDA of $336 million and operating cash flows of $347 million. This robust result demonstrates the quality of the Company’s Australian operating assets at Duketon and Tropicana. This was the Company’s first full year of ownership of its 30% interest in the Tropicana Gold Project, with this project continuing to deliver to expectations. The Company is the fourth largest gold producer on the Australian Stock Exchange (ASX) with 437,309 ounces of gold produced at an All-in Sustaining Cost of $1,556 per ounce. Regis sold a total of 436,045 ounces of gold during the year at an average price of A$2,329 per ounce. The profit result for the year was after non-cash write- downs and impairments totalling $85 million ($60 million after tax). The following graphs illustrate the performance of the Company across financial years for several metrics. Cash and bullion on hand at the end of year was $231 million, after a capital investment of $219 million in mine development, $78 million in property, plant and equipment (including payment of lease liabilities), $22 million in dividends, $56 million in exploration expenditure (including McPhillamys) and $2 million in income tax. The Company paid a total of $22 million in fully franked dividends during the year and subsequent to the end of the financial year declared a 2 cents per share fully franked final dividend. The final dividend was declared after consideration of the expected future cashflow and profitability from the Company’s operations. Since the commencement of dividend payments in 2013, the Company has paid a total of $572 million in fully franked dividends. The chart opposite details the movement in the Company's cash reserves over the financial year. Gold Production & Revenue Net Profix After Tax EBITDA 437 1016 361 363 352 373 819 757 654 606 200 174 163 146 30% 20% 10% 0% 14 394 403 313 307 52 47 52 49 336 33 18 19 20 21 22 18 19 20 21 22 18 19 20 21 22 Gold Prodution (koz) Revenue ($millions) NPAT ($millions) NPAT Margin (%) EBITDA ($millions) EBITDA Margin (%) Earnings & Dividend per Share cents per share Dividends Declared cents per share Cumulative Dividends Paid $millions 39.3 34.6 32.2 26.4 8 8 8 16.0 16.0 16.0 7.0 1.8 2.0 8 8 8 3 4 18 19 20 21 22 18 19 20 21 EPS Dividend per share Final Interim 572 550 488 407 326 245 170 105 75 2 22 14 15 16 17 18 19 20 21 22 700 600 500 400 300 200 100 0 269 1 2 0 2 e n u J Movement in Cash & Bullion - FY2022 $millions 378 (219) (56) (78) (39) 255 (2) (22) s n o i t a r e p O e n M i t n e m p o e v e d l n o i t a r o p x E l s y m a l l i h P c M & x e p a c r e h t O x a t e r o f e b n o i l l u b & h s a C r e h t O & t s e r e t n I , p x E p r o C i s d n e d v d d n a i x a T e m o c n I s d n e d v D i i 231 2 2 0 2 e n u J 8 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 9 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. Review of Operations Duketon Gold Project The Duketon Gold Project is located in the North Eastern Goldfields of Western Australia approximately 130 kilometres north of Laverton. The project area consists of two operating centres being the Duketon 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 Baneygo Gold Mine; and the Duketon North Operations (“DNO”) comprising the Moolart Well Gold Mine and surrounding satellite deposits including the Gloster Gold Mine and Dogbolter Gold Mine. The Duketon Gold Project has in excess of 3,000 square kilometres of exploration and mining tenure, covering more than 90% of the Duketon Greenstone Belt. The Duketon Gold Project produced 315,537 ounces of gold which was within re-stated guidance of 300,000-340,000 ounces for FY2022. With the plant modifications now complete resulting in improved metallurgical recovery, resource modelling performing to expectation and the Garden Well South Underground Mine coming online, Regis is well positioned to deliver a strong FY2023. All-in Sustaining Costs for the year increased to A$1,684 per ounce due to increased fuel and consumables costs while the plant modifications were underway and the inflationary impacts of higher fuel prices. Operations at the Duketon Gold Project. Moolart Well 2.5Mtpa Garden Well 5Mtpa WA Perth Duketon Kalgoorlie 100km Rosemont 2.5Mtpa Operating results for the Duketon Gold Project are summarised below: Ore mined Waste mined Stripping ratio Ore mined Ore milled Head grade Recovery Gold production Cash cost Cash cost inc royalty All-in Sustaining Cost Mbcm Mbcm w:o Mt Mt g/t % koz’s A$/oz A$/oz A$/oz 2022 4.43 24.54 5.5 11.55 9.12 1.20 91 316 1,383 1,499 1,684 2021 4.00 27.10 6.8 9.89 9.52 1.27 92 356 1,041 1,148 1,336 10 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 11 Duketon South Operations The Duketon South Operations (‘DSO’) includes the Garden Well, Rosemont, Erlistoun, Tooheys Well, Baneygo and other satellite projects in proximity to the Garden Well and Rosemont processing plants. Operating results for the year to 30 June 2022 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 2022 3.09 8.88 2.9 8.92 6.11 1.39 90 245 1,319 1,433 1,619 2021 2.50 15.60 6.2 7.03 6.37 1.44 92 271 1,058 1,165 1,368 Production at DSO was 10% lower than the previous year with 244,625 ounces of gold produced at an all-in sustaining cost of $1,619 per ounce. This was due to lower throughput and recovery while plant modifications were made in the second half to allow the higher grade but more metallurgically difficult Tooheys Well ore to be fed at higher rates. This higher-grade ore was stockpiled until the plant modifications were completed in the last quarter of the financial year. AISC increased by 18% due to lower gold production, and higher mining and processing costs, which included increased fuel costs and reagant usage. Duketon North Operations Duketon North Operations (‘DNO’) comprises the Moolart Well, Gloster and Dogbolter pits with all ore processed through the Moolart Well processing plant. Operating results for the year to 30 June 2022 were as follows: Ore mined Waste mined Stripping ratio Ore mined Ore milled Head grade Recovery Gold production Cash cost Cash cost inc royalty All-in Sustaining Cost Mbcm Mbcm w:o Mt Mt g/t % koz’s A$/oz A$/oz A$/oz 2022 1.34 15.67 11.7 2.63 3.00 0.81 91 71 1,606 1,726 1,908 2021 1.50 11.51 7.7 2.86 3.15 0.92 91 85 989 1,092 1,174 DNO produced 70,912 ounces of gold for the year at an all-in sustaining cost of $1,908 per ounce. Gold production was down 16% on the prior year as a result of lower throughput and recovery associated with increased variability in ore mined in the first half of the year. Lower grade stockpiles were also used as mill feed during this time. AISC increased by 63% on the prior year due mainly to lower gold production, increases associated with surface haulage and the inflationary impacts of higher fuel and reagant usage. Tropicana Gold Project The Tropicana Gold Project is located in the Albany-Fraser Belt, approximately 330 kilometres north-east of Kalgoorlie in Western Australia. Tropicana is operated by joint venture partner AngloGold Ashanti Australia Limited and contains the Tropicana, Havana and Boston Shaker open pits and the Boston Shaker underground operation. Tropicana holds the mineral rights to approximately 2,600 square kilometres of WA exploration tenements that are held in a Joint Venture agreement between Regis (30%) and AngloGold Ashanti Australia Limited (70%). WA Tropicana Gold Project Kalgoorlie Perth Layout of the Tropicana Mine. Operating results for the Tropicana Gold Project (at 30%) were as follows (NB. Owned for 2 months in prior year): Ore mined Waste mined Stripping ratio Ore mined Ore milled Head grade Recovery Gold production Cash cost Cash cost inc royalty All-in Sustaining Cost 2022 2021 Mbcm Mbcm w:o Mt Mt g/t % koz’s A$/oz A$/oz A$/oz 0.27 7.61 28.1 1.16 2.87 1.47 90 121 1,081 1,143 1,133 0.05 1.16 25.3 0.17 0.43 1.39 90 17 1,240 1,300 2,121 The first full year of production at Tropicana totalled 121,772 ounces (30%) at an all-in sustaining cost of $1,133 per ounce. 12 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 13 Gold Exploration Duketon Greenstone Belt geology interpretation Garden Well Main underground potential takes shape During the year, a total of 355,681 metres of exploration drilling was completed with 238,713 metres across the Group’s tenements at Duketon and 116,968 metres at Tropicana. Duketon Gold Project Regis controls a significant tenement package across the majority of the Duketon Greenstone Belt. The tenement holding encompasses 141 granted exploration licences, prospecting licences and mining leases, across approximately 2,900 square kilometres. The Duketon Gold Project continues to deliver on its strong history of reserve replacement built on an ongoing commitment to exploration and resource extension drilling. An aggressive exploration programme continues to be focussed on potential areas for the identification of both new mineralisation and expansions of current mineral resources with many promising targets generated for testing in the coming year. Drilling continued within the target area down plunge of the Garden Well Main (GWM) pit mineralisation. High grade shoots hosted in sheared mafic rocks have been identified and diamond drilling continued to test the continuity of the gold mineralisation. These strong results demonstrate the potential of an additional underground production area at GWM and grow the potential scale of the system. Work has recently commenced on an exploration decline from the nearby South mine. Garden Well long section looking west showing high grade intersections under Main pit, and the existing underground mine design at Garden Well South. 14 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 15 Rosemont depth extensions continue to show encouraging results Moolart Well: extension drilling Drilling continued during the period at Rosemont to explore the high-grade shoots which extend at depth beneath existing underground At Moolart Well (Wellington and Buckingham pit areas) drilling continued to test for resources extensions in a shallow plunging shoot infrastructure and along strike to the south. south of Buckingham and beneath the final pit design at Wellington. The Commonwealth prospect is located 10km west of Moolart Well. Infill drilling continues to show promise and the Company is undertaking further analysis to determine the potential for an additional open pit oxide ore source for Moolart Well. Tropicana Gold Project Tropicana, on the western edge of the Great Victoria Desert in Western Australia, is approximately 1,000 kilometres east north east of Perth. Tropicana holds mineral rights to approximately 2,400 square kilometres of exploration and mining tenements that are held in Joint Venture agreement between Regis (30%) and Joint Venture Manager AngloGold Ashanti Australia Limited (70%). Work programmes continue to assess the potential for additional underground mines below the final design limits of the Havana and Havana South open pits. In addition, significant near mine and regional exploration programs continue around Tropicana to unlock new discoveries and mine life extensions. Rosemont South long section showing high grade intersections Tropicana long section. 16 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 17 Boston Shaker Underground continuing to grow at Tropicana JV A third potential production zone shapes up at Havana Underground Exploration drilling at Boston Shaker has continued to test and confirm the down-plunge mineralisation beyond the boundaries of the The Havana underground programme is designed to convert a portion of the underground inferred resource to higher confidence existing resources. Highly significant results were returned during the year highlighting the potential for the Boston Shaker UG resource indicated. This area lies beneath the base of the planned Havana Pit. to grow further. Boston Shaker long-section displaying gram metre pierce points and 0.3g/t Au mineralisation zone and recent high grade intercepts outside of the current modelled mineralised zone. Long section of Havana deposit with conceptual UG design and recent intersections Group Resource & Reserve Growth Group Mineral Resources and Ore Reserves are respectively. Table 1: Group Mineral Resources as at 31 December 2021 (Regis Attributable) Measured Indicated Inferred Total Resource Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces (Mt) (g/t) (000s) Regis Total 40 0.9 1,210 (Mt) 199 (g/t) (000s) (Mt) (g/t) (000s) 1.1 6,770 48 1.3 1,940 (Mt) 287 (g/t) (000s) 1.1 9,920 Table 2: Group Ore Reserves as at 31 December 2021 (Regis Attributable) Regis Total 21 0.8 520 96 1.2 3,620 (Mt) (g/t) (000s) (Mt) (g/t) (000s) (Mt) 117 (g/t) (000s) 1.1 4,140 Proven Probable Total Resource Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces The Company released an updated annual Mineral Resource and Ore Reserve Statement in June 2022. The Group Mineral Resources as at 31 December 2021, reported in accordance with the JORC Code 2012, are estimated to be 287Mt at 1.1 g/t gold for 9.92Moz gold. This compares with the estimate at 31 December 2020 of 301Mt at 1.1 g/t Au for 10.36Moz of gold as announced 15 June 2021 post the acquisition of 30% of Tropicana. Mineral Resources were estimated using a gold price of $2,015/oz (weighted average). Boston Shaker Cross-section A-A showing the down-plunge continuation of economic mineralisation down plunge outside of the current modelled mineralised zone. 18 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 19 A summary of the year on year changes is as follows: McPhillamys Gold Project Mineral Resource Changes from December 2020 to December 2021 (koz) 10,360 9,870 140 9,920 -490 -90 The Definitive Feasibility Study (“DFS”) work continued with a finalised project scope and mine plan completed. Key bidders on the major contract packages are providing revised pricing and schedule based on latest scope and other project information, noting that the current inflationary environment continues to put pressure on the capital cost of the project. Finalising the DFS remains linked to Department of Planning, Industry and Environment (“DPIE”) assessment recommendations. The Project remains in the penultimate phase of the process, which sees DPIE assess the Development Application (“DA”) and make its recommendation to the Independent Planning Commission (‘IPC’). Regis notes that the final decision by the government is still to be made and it is anticipated a recommendation by DPIE to the IPC has the potential to be made in FY23. The Company continues to work with the local and surrounding communities to ensure opportunities and impacts presented by the project development are communicated and mitigated where practicable. December 2020 Depletion December 2020 (Net) Tropicana Duketon December 2021 The Group Ore Reserves as at 31 December 2021, reported in accordance with the JORC Code 2012, are estimated to be 117Mt at 1.1 g/t gold for 4.14Moz gold. This compares with the estimate at 31 December 2020 of 145Mt at 1.0 g/t Au for 4.83Moz of gold as announced 15 June 2021 post the acquisition of 30% of Tropicana. Ore Reserves were estimated at the long term gold price of $1,623/oz (weighted average) using the following gold price assumptions: • Duketon North: $2,000 /oz • Duketon South: $1,600 /oz • McPhillamys: $1,600 /oz • Tropicana: $1,633 /oz A summary of the year on year changes is shown below: Ore Reserves Changes from December 2020 to December 2021 (koz) 4,830 4,340 -490 -210 -130 110 30 4,140 December 2020 Depletion December 2020 (Net) DNO Open Pit DSO Underground DNO Open Pit Tropicana December 2021 McPhillamys Gold Project location and NSW tenure. 20 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 21 Mineral Resources and Ore Reserves 22 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 23 l d o G l d o G l d o G l d o G l d o G l d o G l d o G l d o G t n e t e p m o C l a t e M e d a r G s e n n o T l a t e M e d a r G s e n n o T l a t e M e d a r G s e n n o T l a t e M e d a r G s e n n o T f f O - 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Directors The directors of Regis Resources Limited (“Regis” or “Company”) in office since 1 July 2021 and up to the date of this report are: Mr James Mactier, BAgrEc (Hons), GradDipAppFin, GAICD (Independent Non-Executive Chairman) 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 also a member of Resource Capital Fund’s Managing Partner’s Advisory Board. During the past three years, Mr Mactier has not served as a director of any other ASX listed company. Mr Jim Beyer, BEng, MGeoSc, AMEC (Chief Executive Officer and Managing Director) 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 ASX- listed iron ore producer and explorer Mt Gibson Iron Limited 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. Mrs Fiona Morgan, CPEng, BE(Hons), FIEAust, FAusIMM, GAICD (Independent Non-Executive Director) Mrs Morgan is a Chartered Professional Engineer with over 29 years’ experience in the mining industry, including working on gold, nickel, coal and iron ore projects. Mrs Morgan was 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. Mrs Morgan stepped down as Managing Director and Chief Executive Officer in September 2021 and remained a Non-Executive Director of Mintrex Pty Ltd until 30 June 2022. She has wide ranging 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 company. 26 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 27 Directors’ ReportNotes to the Financial Statements (continued)For the year ended 30 June 2022Mr Steve Scudamore, BA (Hons) MA (Oxon), FCA, FAICD, SF Fin, HonDUniv (Curtin) (Independent Non-Executive Director) 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 Bachelor and Masters of Arts (History and Economics) from Oxford University, is a Fellow of Chartered Accountants Australia and New Zealand and the Institute of Chartered Accountants in England and Wales, is a Fellow of the Institute of Company Directors and a Senior Fellow of the Financial Services Institute of Australia. In February 2021, Curtin University conferred upon him an Honorary Doctorate of the University. 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. Other than as mentioned above, during the past three years Mr Scudamore has not served as a director of any other ASX listed companies. Mrs Lynda Burnett, BSc (Hons), GAICD, MAusIMM, MSEG (Independent Non-Executive Director) Mrs Burnett is a geologist with over 30 years’ experience in the mining industry. She has held a variety of roles with major and junior mining companies most recently with ASX- listed Sipa Resources Limited as Managing Director, ceasing on 31 January 2020. Prior to Sipa Resources Limited, Mrs Burnett spent 9 years with Newmont Asia Pacific as Director Exploration Australia and Manager Exploration Business Development with responsibility for the strategic planning, management and oversight of all Newmont’s generative exploration projects and brown fields exploration projects. Prior to her roles at Newmont, she worked for a number of mining and exploration companies including, Normandy Mining Limited, Newcrest Mining Limited, Plutonic Resources Limited and as an Executive Director of Summit Resources Limited. From 2009 to 2021 Mrs Burnett served on the Strategic Advisory Board of the Centre for Exploration Targeting based at the School of Earth Sciences, University of WA. Other than as mentioned above, during the past three years Mrs Burnett has not served as a director of any other ASX listed companies. Mr Russell Barwick, Dip. Min Eng, FAusIMM, FAICD (resigned 14 January 2022) (Independent Non-Executive Director) Mr Barwick is a mining engineer with extensive technical, operational, managerial and corporate experience in the mining industry across a wide range of commodities and jurisdictions. He is currently a Non-Executive Director of ASX listed companies Mount Gibson Iron Limited, Red Metal Limited (Chairman) and Lithium Power International Limited and the associated unlisted Minera Salar Blanco S.A. (Chile). Starting his career in 1974, Mr Barwick worked for Bougainville Copper Limited (CRA), Pancontinental Mining Limited and CSR Limited and spent 16 years with Placer Dome in key development, operational and corporate roles in numerous countries before his appointment as Managing Director of Placer Niugini Limited. He later served as Managing Director of Newcrest Mining Limited before moving to Canada as Chief Operating Officer for Wheaton River Minerals Limited and its successor, Goldcorp Inc. Mr Barwick returned to Australia in 2008 and resides in Queensland. Mr Barwick holds a Diploma in Mining Engineering (Ballarat) and is a Fellow of both the Australasian Institute of Mining and Metallurgy, and the Australian Institute of Company Directors. Other than as mentioned above, during the past three years Mr Barwick has not served as a director of any other ASX listed companies. Company Secretary Ms Elena Macrides, BSc, LLB, MBA, GAICD Ms Macrides is a solicitor with over 20 years’ experience in legal and strategic consulting roles. Her project experience includes commercial roles at Rio Tinto Iron Ore and she has strategy consulting experience in Perth, Sydney and Melbourne across a broad range of industries. Ms Macrides also spent a number of years in private practice as a solicitor at two national firms. She is a graduate member of the Australian Institute of Company Directors and holds a Bachelor of Science/Bachelor of Laws and Masters of Business Administration from the University of Western Australia. Ms Macrides joined Regis as Assistant Company Secretary in May 2020 and was appointed Company Secretary in January 2021. Dividends Dividends paid or declared by the Company to members since the end of the previous financial year were: Declared and paid during the 2022 financial year Ordinary shares Declared after year end Cents Total amount per share $’000 Date of Payment 3.0 22,627 28 September 2021 After the balance sheet date the following dividends were Cents Total amount proposed by the directors Ordinary shares per share 2.0 $’000 15,097 Date of Payment 28 October 2022 Nature of Operations and Principal Activities The principal activities of the Company and its controlled entities (collectively, the “Group”) during the year were: • Production of gold from the Duketon Gold Project; • Production of gold (non-operator) from the Company’s 30% interest in the Tropicana Gold Project (“Tropicana”); • Exploration, evaluation and development of gold projects in the Goldfields of Western Australia; and • Evaluation and progression of approvals for 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. Company Strategy for Value Growth The Group’s strategy is to continue to build a profitable and sustainable mid-tier gold company and is driving to achieve this strategy through continuing to: • Focus on mining safely and responsibly; • Deliver value through its existing operations and projects; • Grow organically through exploration; and • Assess opportunities for inorganic growth. Objectives Completed in FY22 that Contribute to Strategy Delivery During the FY22 year, the Company has delivered in each of these areas of its strategy through: • A continuing focus on a safe workplace for everyone, every day. This has included a committed and sustained approach to managing Covid-19 related risks to our people in the workplace. The development a strong safety culture is demonstrated by the Lost Time Injury Frequency Rate continuing to be well below the industry average; • A record full year of gold production; • Increasing production from Rosemont Underground and the development at Garden Well Underground; • An increase in the Company’s Resources prior to depletion with potential for further mine life extension at Duketon as a result of recent exploration; • The reliable delivery of production from Tropicana, purchased in the prior year; and • Positive progress made regarding the permitting of the McPhillamys Gold Project, one of Australia’s largest undeveloped open pit gold projects. 28 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 29 Directors’ ReportDirectors’ ReportObjectives Going Forward 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 at the Duketon Gold Project through this process of optimisation and the blending of ore feed from satellite resources across the Duketon tenure; • Continue to work with the Company’s joint venture partner (AngloGold Ashanti Australia Limited) to deliver value from Tropicana; Performance relative to the previous financial year Consolidated net profit after tax was $13.8 million for the full year to 30 June 2022 which was 90.6% lower than the previous corresponding year result of $146.2 million. Higher gold sales revenue during the year was offset by increased mining and processing costs, ore stockpile write-downs totalling $74.2 million and a $105.5 million increase in depreciation and amortisation charges for the period. Sales The Company produced 437,309 ounces of gold for the year ended 30 June 2022 with 315,537 ounces from the Company’s Duketon • Organically increase the Reserve base of the Group by discovering and developing satellite resource positions and extending the Operations and 121,772 from its 30% interest in Tropicana. Gold sales revenue rose by 18.7% from the previous year with 436,045 reserve base of existing operating deposits; • Focus on regional exploration to add incremental ounces and mine life to the three operating mills at Duketon; • Advance the economic study and permitting of the McPhillamys Gold Project in NSW with a view to developing a significant long-life gold mine; • Return value to shareholders through dividends where appropriate; and • Actively pursue inorganic growth opportunities. Operating and Financial Review Overview of the Group Regis is an Australian gold producer with its head office in Perth, Western Australia. The Company has two distinct project areas at the Duketon Gold Project in the Eastern Goldfields of Western Australia. The Duketon South Operations (“DSO”) contain the Garden Well Gold Mine (open pit with an underground mine in development), the Rosemont Gold Mine (open pit and underground), the Erlistoun gold deposit, the Tooheys Well gold deposit and the Baneygo gold deposit. The Duketon North Operations (“DNO”) comprise the Moolart Well Open Pit Gold Mine, the Gloster gold deposit, Dogbolter Coopers gold deposits and the Anchor gold deposit where mining was completed early in the current year. The Company has a 30% interest in the Tropicana Gold Project located in the Albany-Fraser Belt, approximately 330 kilometres north- east of Kalgoorlie in Western Australia. Tropicana is operated by joint venture partner AngloGold Ashanti Australia Limited and includes the Havana and Boston Shaker open-pit operations and the Boston Shaker and Tropicana underground operations. The interest in Tropicana was acquired in the last quarter of the previous financial year. 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 Cost of sales (excluding D&A)(i) Other income/(expenses) Corporate, admin and other costs EBITDA(i) Depreciation and amortisation (D&A) Impairment of non-current assets Finance costs Profit before tax(i) Income tax expense Reported profit after tax Other financial information Cash flow from operating activities Cash and cash equivalents Interest-bearing liabilities Net cash/(debt) Net assets 2022 $’000 1,015,698 (651,736) (1,912) (25,937) 336,113 (294,588) (11,117) (11,210) 19,443 (5,668) 13,775 346,994 207,354 (295,883) (88,529) 2021 $’000 818,835 (394,011) (402) (20,431) 403,991 (189,049) (610) (2,265) 212,394 (66,196) 146,198 276,286 242,627 (293,821) (51,194) 1,577,299 1,584,305 Basic earnings per share (cents per share) 1.83 26.37 Change $’000 196,863 (257,725) (1,510) (5,506) (67,878) (105,539) (10,507) (8,945) (192,951) 60,528 (132,423) 70,708 (35,273) (2,062) (37,335) (7,006) (24.54) Change % 24% 65% 376% 27% (17%) 56% 1,622% 295% (91%) 91% (91%) 26% (15%) 1% (73%) 0% (93%) (i) EBITDA is an adjusted measure of earnings before interest (finance costs), taxes, depreciation and amortisation (and impairment of non-current assets). 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 ounces of gold sold at an average price of $2,329 per ounce in 2022 (2021: 367,285 ounces at $2,229 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 220,000 ounces at a fixed price of $1,571 per ounce (2021: 320,000 ounces at a fixed price of $1,571 per ounce). The Company has committed to deliver a further 100,000 ounces at the same fixed price in the 2023 financial year. Cost of Sales Costs of sales including royalties and the write down of ore stockpiles, but before depreciation and amortisation increased by 65.4% to $651.7 million. Depreciation and Amortisation The 55.8% increase in depreciation and amortisation charges was predominantly a result of the addition of assets associated with the Tropicana Gold Project and the continued development of the underlying Mine Properties assets (Refer Note 14). Cash Flow from Operating Activities Cash flow from operating activities was $347.0 million, up 26% on the prior year mainly due to cash flows associated with the Tropicana acquisition. During the year, the Company paid (net) $2.4 million of income taxes. The Company paid a fully franked dividend in FY22 totalling $22.6 million. Duketon South Operations (“DSO”) Operating results at the Duketon South Operations for the 12 months to 30 June 2022 were as follows: Ore mined Waste mined Strip ratio Ore mined Ore milled Head grade Recovery Gold production Cash cost per ounce – pre royalties(ii) Cash cost per ounce – incl. royalties(ii) All-in Sustaining Cost (“AISC”)(ii) BCM BCM w:o Tonnes Tonnes g/t % 30 June 2022 30 June 2021 3,085,051 2,500,701 8,876,101 15,597,136 2.9 8,916,874 6,111,534 1.39 90 6.2 7,034,770 6,366,312 1.44 92 Ounces 244,625 270,987 A$/oz A$/oz A$/oz 1,319 1,433 1,619 1,058 1,165 1,368 (ii) Cash costs per ounce of production and all-in sustaining costs (“AISC”) per ounce of production are non-IFRS financial information and not subject to audit. These are comparable measures commonly used in the mining industry and in particular the gold mining industry. The Company follows the World Gold Council guidelines for reporting AISC. Throughout the financial year and in the following tables, AISC has been reported excluding the impacts of the write-downs in inventory ore stockpiles as these write-downs predominantly relate to ore mined in previous years (sunk costs) which have not been processed in the current year and the majority of which is not expected to be processed in the following year. For further details of ore stockpile write- downs refer to Note 3 and Note 9 to the annual financial statements. Production at DSO was 10% lower than the previous year with 244,625 ounces of gold produced at an all-in sustaining cost of $1,619 per ounce. This was due to lower throughput and recovery while plant modifications were made in the second half to allow the higher grade but more metallurgically difficult Tooheys Well ore to be fed at higher rates. This higher grade ore was stockpiled until the plant modifications were completed in last quarter of the financial year. AISC increased by 18% due to lower gold production, and higher mining and processing costs, which included increased fuel costs and chemical usage. 30 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 31 Directors’ ReportDirectors’ ReportDuketon North Operations (“DNO”) Operating results for the 12 months to 30 June 2022 were as follows: Ore mined Waste mined Strip ratio Ore mined Ore milled Head grade Recovery Gold production Cash cost per ounce – pre royalties(ii) Cash cost per ounce – incl. royalties(ii) All-in Sustaining Cost (“AISC”)(ii) BCM BCM w:o Tonnes Tonnes g/t % 30 June 2022 30 June 2021 1,342,547 1,498,524 15,665,908 11,505,350 11.7 2,628,816 3,003,069 0.81 91 7.7 2,858,047 3,151,223 0.92 91 Ounces 70,912 84,566 A$/oz A$/oz A$/oz 1,606 1,726 1,908 989 1,092 1,174 DNO produced 70,912 ounces of gold for the year at an all-in sustaining cost of $1,908 per ounce. Gold production was down 16% on the prior year as a result of lower throughput and recovery associated with increased variability in ore mined in the first half of the year. Lower grade stockpiles were also used as mill feed during this time. AISC increased by 63% on the prior year due mainly to lower gold production, increases associated with surface haulage and the inflationary impacts of higher fuel and chemical usage. Tropicana Gold Project Operating results (at 30%) for the 12 months to 30 June 2022 were as follows: Ore mined Waste mined Strip ratio Ore mined Ore milled Head grade Recovery Gold production Cash cost per ounce – pre royalties(ii) Cash cost per ounce – incl. royalties(ii) All-in Sustaining Cost (“AISC”)(ii) 30 June 2022 30 June 2021 (12 months) (2 months) 270,881 45,855 7,607,057 1,161,622 28.1 1,163,220 2,871,648 1.47 90 25.3 174,932 429,554 1.39 90 BCM BCM w:o Tonnes Tonnes g/t % Ounces 121,772 17,317 A$/oz A$/oz A$/oz 1,081 1,143 1,133 1,240 1,300 2,121 The first full year of production at Tropicana totalled 121,772 ounces (30%) at an all-in sustaining cost of $1,133 per ounce. The high AISC in the prior year was due to low production in the two-month period following acquisition with lower grade stockpiles being used as mill feed while the Havana open-pit cutback occurred along with a planned mill maintenance shutdown in June 2021. Exploration During the year, a total of 355,681 metres of exploration drilling was completed with 238,713 metres across the Group’s tenements at Duketon and 116,968 metres at Tropicana. The Tropicana exploration drilling comprised 15,405 metres of aircore drilling, 43,524 metres of RC drilling and 58,039 metres of diamond drilling. Regis’ exploration for FY22 reflects the Company’s growth strategy which continues to test for near mine extensions and new greenfield targets across the Company’s tenure in the Duketon Greenstone Belt. The table below breaks down the drilling activity (in metres) by Prospect at Duketon: Aircore RC Diamond Total Prospect Aircore 11,045 RC Diamond Total - - 11,045 Moolart Well - 27,266 1,496 28,762 Prospect Bandya Baneygo Ben Hur 7,791 - - - 2,672 10,716 Betelgeuse 10,686 1,224 Camel Hump Claypan 720 - - - Commonwealth 17,693 8,189 Davies Bores 126 Duketon Townsite 2,245 - - - - - - - 927 273 - - Mitchell 7,791 2,672 10,716 Petra 11,910 Risden Well 720 927 Rosemont Speights 26,155 Swansons 126 Swincer 2,245 Terminator Garden Well Gilga Well Gloster Jester King Of Creation Kintyre Laika Maverick - 2,316 11,429 13,745 Thompson Bore 7,462 - - - - - 6,245 1,081 1,252 11,179 6,081 - - 1,987 - - - - - - - 7,462 6,245 1,081 1,252 Tooheys Well Vega Ventor White Nile 11,179 Yellow River 694 2,012 - - - - 694 2,012 - 1,929 22,618 24,547 2,344 8,364 1,334 - - - 8,573 - - - 5,746 5,378 34 - - 14,802 1,951 8,107 - - - - - - - 2,726 - - - - 2,344 8,364 1,334 5,746 5,378 2,760 8,573 14,802 1,951 8,107 Total 97,228 102,016 39,469 238,713 6,081 1,987 Significant projects advanced during the year ended 30 June 2022 are outlined below. All drilling results and resource estimations highlighted below are detailed fully in announcements to the ASX made by the Company throughout the year, along with the associated JORC 2012 disclosures. Development – Garden Well South Underground Project The Garden Well Project is a fully operational open pit gold mine which commenced production in 2013, having stand-alone crushing, grinding, Carbon in Leach (‘CIL’) processing and tailings storage facilities. The Garden Well deposit lies in the Duketon Greenstone Belt (‘DGB’) in the north-eastern part of the Archean Yilgarn Craton of Western Australia. The DGB is characterised by a strong North-South structural trend defined by major faults and shear zones, regional folds and granite batholiths. Development of the Garden Well South (GWS) Underground mine below the current Garden Well open pit commenced in early 2021. The Feasibility Study detailed that this additional production source is expected to provide access to material mined of 1.85 million tonnes at 3.2g/t Au for a total of 190,000 ounces. There is strong potential down plunge of the existing planned mining area and work is continuing to grow and define additional resources via drilling from underground platforms. Development of the GWS Underground mine continued with 2,777 metres of capital development achieved during the year. 32 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 33 Directors’ ReportDirectors’ ReportDevelopment – McPhillamys Gold Project NSW Mineral Resource and Ore Reserve Estimates 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. The current Ore Reserve for the McPhillamys Gold Project is 61 million tonnes at 1.0g/t Au for 2.02 million ounces. The Definitive Feasibility Study (“DFS”) work continued with a finalised project scope and mine plan completed. Key bidders on the major contract packages are providing revised pricing and schedule based on latest scope and other project information, noting that the current inflationary environment continues to put pressure on the capital cost of the project. Finalising the DFS remains linked to Department of Planning, Industry and Environment (“DPIE”) assessment recommendations. The Project remains in the penultimate phase of the process, which sees DPIE assess the Development Application (“DA”) and make its recommendation to the Independent Planning Commission (‘IPC’). Regis notes that the final decision by the government is still to be made and it is anticipated a recommendation by DPIE to the IPC has the potential to be made in FY23. Mineral resources and ore reserves are estimates only and no assurance can be given that the anticipated tonnages and grades will be achieved, that the indicated level of recovery will be realised or that mineral reserves could be mined or processed profitably. There are numerous uncertainties inherent in estimating mineral resources and ore reserves, including many factors beyond Regis’ control. Such estimation is a subjective process, and the accuracy of any reserve or resource estimate is a function of the quantity and quality of available data and of the assumptions made and judgements used in engineering and geological interpretation. Short term operating factors in relation to the mineral reserves, such as the need for the orderly development of ore bodies or the processing of new or different ore grades, may cause mining operations to be unprofitable in any particular accounting period. In addition, there can be no assurance that gold recoveries in small scale laboratory tests will be duplicated in larger scale tests under on-site conditions or during production. Fluctuation in gold prices, results of drilling, metallurgical testing, changes in production costs, and the evaluation of mine plans subsequent to the date of any estimate may require the revision of such estimates. The volume and grade of reserves mined and processed, and recovery rates, may not be the same as currently anticipated. Any material reductions in estimated mineral resources and ore reserves, or of Regis’ ability to extract these mineral reserves, could have a material adverse effect on the results of operations The Company continues to work with the local and surrounding communities to ensure opportunities and impacts presented by the and financial condition. project development are communicated and mitigated where practicable. Tropicana Gold Project Tropicana, on the western edge of the Great Victoria Desert in Western Australia, is approximately 1,000 kilometres east north east of Perth. Tropicana holds the mineral rights to approximately 2,600 square kilometres of WA exploration tenements that are held in Joint Venture agreement between Regis (30%) and Joint Venture Manager AngloGold Ashanti Australia Limited (70%). Tropicana currently has a Mineral Resources Estimate of 126 million tonnes at 1.7 g/t Au for 6.95 million ounces (100%) and an Ore Reserves Estimate of 43 million tonnes at 1.7 g/t Au for 2.38 million ounces (100%). Work programmes continue to assess the potential for additional underground mines below the final design limits of the Havana and Havana South open pits. In addition, significant near mine and regional exploration programs continue around Tropicana to unlock new discoveries and mine life extensions. Material Business Risks The material business risks faced by Regis that may have an impact on the financial and operating performance of the Company are: Gold Price Regis revenues are exposed to fluctuations in the gold price. Volatility in the gold price creates revenue uncertainty and requires careful management of business performance to ensure that operating cash margins are retained despite a fall in the spot gold price. The risks associated with such fluctuations and volatility may be reduced by any gold price hedging that Regis may undertake. A declining gold price can also impact operations by requiring a reassessment of the feasibility of mine plans and certain projects and initiatives. The development of new ore bodies, commencement of development projects and the ongoing commitment to exploration projects can all potentially be impacted by a decline in the prevailing gold price. Even if a project is ultimately determined to be economically viable, the need to conduct such a reassessment could potentially cause substantial delays and/or may interrupt operations, which may have a material adverse effect on the Company’s results of operations and financial condition. Foreign Exchange Rate Risk Regis is an Australian business that reports in Australian dollars. Revenue is derived from the sale of gold in Australian dollars and costs are mainly incurred by its business in Australian dollars. However, because gold is globally traded in US dollars, Regis is exposed to foreign exchange risk. Therefore, movements in the US$/A$ exchange rate may adversely or beneficially affect the Company’s results of operations and cash flows. The risks associated with such fluctuations and volatility may be reduced by any currency hedging Regis may undertake, though there is no assurance as to the efficacy of such currency hedging. Regis hedges its gold ounces in Australian dollars, which, given revenue is derived from sale of gold in US dollars, provides for some coverage of foreign exchange risk. Operational Risk Drilling, mining and processing activities carry risk and as such, activities may be curtailed, delayed or cancelled as a result of a number of factors outside the Company’s control. These include geological conditions, technical difficulties, securing and maintaining tenements, weather, residue storage and tailings dam failures and construction of efficient processing facilities. The operation may be affected by force majeure, fires, labour disruptions and availability, landslides, the inability to obtain adequate machinery, engineering difficulties and other unforeseen events. As with most mines, reserves, resources and stockpiles are based on estimates of grade, volume and tonnage. The accuracy and precision of these estimates will depend upon drill spacing and other information such as continuity, geology, rock density, metallurgical characteristics, mining dilution and costs, etc. which evolve as the mine moves through different parts of the ore body. Regis endeavours to take appropriate action to mitigate these operational risks (including by properly documenting arrangements with counterparties, and adopting industry best practice policies and procedures) or to insure against them, but the occurrence of any one or a combination of these events may have a material adverse effect on the Company’s performance and the value of its assets. Effectiveness of Regis Gold Price Hedging Regis currently has certain gold price hedging arrangements in place and may in the future choose to or be required to enter into further gold price hedging arrangements. Although gold price hedging activities may protect Regis in certain instances, they may also limit the price that can be realised on the proportion of recovered gold that is subject to any hedges, in the event that the market price for gold exceeds the hedged contract price (meaning rising gold prices could result in part of Regis’ gold production being sold at less than the prevailing spot price at the time of the sale). In this event, Regis’ financial performance may be adversely affected. COVID-19 The Regis Management Team has continued to manage the Company’s ongoing response to COVID-19 in cooperation with our contractors. The COVID-19 situation remains fluid and the Company will continue to monitor and manage for potential impacts, particularly around labour availability. The Company is maintaining a range of measures across its business consistent with advice from State and Federal health authorities and commensurate with the community risk profile. These measures help ensure the health and welfare of our employees and their respective communities. Debt and Hedging Covenants The Company has entered into agreements with financiers and hedge providers that contain various undertakings and financial covenants. Non-compliance with the undertakings and covenants contained in these agreements could lead to a default event resulting in the debt becoming due and payable with potentially adverse effects on the financial position of the Company. Management continually monitor for compliance with the required undertakings and covenants. Climate Change The current and future activities of Regis, including development of its projects, mining volumes, mining exploration and production activities may be affected by factors such as seasonal and unexpected weather patterns, heavy rain, floods, droughts and other weather and climatic conditions. The effects of changes in rainfall patterns, water shortages and changing storm patterns and intensities may adversely impact the costs, production levels and financial performance of Regis’ operations. Changes to climate related regulations and government policy have the potential to impact on our financial results. These changes may include the imposition of a carbon tax on carbon output or the implementation of new taxes on diesel fuel which would impact the Company given its current reliance on diesel across its operations. Government Policy and Permits In the ordinary course of business, mining companies are required to seek governmental permits for exploration, expansion of existing operations or for the commencement of new operations. The duration and success of permitting efforts are contingent upon many variables not within the control of Regis. There can be no assurance that all necessary permits will be obtained, and, if obtained, that the costs involved will not exceed those estimated by Regis. 34 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 35 Directors’ ReportDirectors’ ReportSignificant Changes in the State of Affairs There have been no significant changes in the state of affairs other than those listed in the review of operations above. Peformance Rights Unissued Shares Significant Events after the Balance Date Share issue Subsequent to year end, 137,675 shares have been issued as a result of the vesting of performance rights. Payment of Stamp Duty In July 2022, stamp duty of $38,970,000 was paid in relation to the prior year acquisition of Tropicana. Dividends At the date of this report, the Company had the following unissued shares under unvested performance rights. Vesting Date 30 June 2023 30 June 2024 Number outstanding 300,087 640,272 At the date of this report, the Company has 48,537 unissued shares relating to vested performance rights. Performance rights holders do not have any right, by virtue of the performance rights, to participate in any share issue of the Company On 24 August 2022, the Directors proposed a final dividend on ordinary shares in respect of the 2022 financial year. Refer to Note 6. or any related body corporate. Settlement of Property Purchase Details of performance rights granted to directors and other key management personnel during the year are set out in the remuneration During the current year, the Group entered into a contract to purchase a property in New South Wales for $22,500,000 for the purposes of the McPhillamys Project. The purchase was settled in July 2022. Other than the above matters, there has not arisen in the interval between the end of the financial year and the date of this Report any item, transaction or event of a material and unusual nature which, in the opinion of the directors of the Group, has significantly affected or is likely to significantly affect: • • • the operations of the Group; the results of those operations; or the state of affairs of the Group in future financial years. Likely Developments and Expected Results There are no likely developments of which the directors are aware which could be expected to significantly affect the results of the Group’s operations in subsequent financial years not otherwise disclosed in the Principal Activities, Operating and Financial Review, Material Business Risks or the Significant Events after the Balance Date sections of the Directors’ Report. report. Indemnification and Insurance of Directors and Officers The Company has entered into an Indemnity Deed with each of the directors which will indemnify them against liabilities incurred to a third party (not being the Company or any related company) where the liability does not arise out of negligent conduct including a breach of good faith. The Indemnity Deed will continue to apply for a period of 10 years after a director ceases to hold office. The Company has entered into a Director’s Access and Insurance Deed with each of the directors pursuant to which a director can request access to copies of documents provided to the director whilst serving the Company for a period of 10 years after the director ceases to hold office. There are certain restrictions on the directors’ entitlement to access under the deed. In addition, the Company will be obliged to use reasonable endeavours to obtain and maintain insurance for a former director similar to that which existed at the time the director ceased to hold office. The Company has, during or since the end of the financial year, paid an insurance premium in respect of an insurance policy for the benefit of the directors, secretaries, executive officers and employees of the Company and any related bodies corporate as defined in the insurance policy. The insurance grants indemnity against liabilities permitted to be indemnified by the Company under Section 199B of the Corporations Act 2001. In accordance with commercial practice, the insurance policy prohibits disclosure of the terms of the policy including the nature of the liability insured against and the amount of the premium. Environmental Regulation and Performance Directors’ Meetings 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. Share Options Unissued Shares At the date of this report, the Company had no unissued shares under unlisted options. Shares Issued as a Result of the Exercise of Options There were no unlisted options exercised by employees during the financial year. 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: Remuneration, Risk, Safety, Nomination and Environment and Directors’ Meetings Audit Committee Diversity Committee Community Committee No. No. No. No. Scheduled No. Scheduled No. Scheduled No. Scheduled No. to Attend Attended to Attend Attended to Attend Attended to Attend Attended 10 10 10 10 10 4 10 10 9 10 10 4 4 - - 4 4 - 4 - - 4 4 - 4 - - 4 4 - 4 - - 4 4 - - - 5 5 5 3 - - 5 5 5 3 J Mactier J Beyer F Morgan S Scudamore L Burnett R Barwick(i) (i) R Barwick resigned on 14 January 2022 as Independent Non-Executive Director. 36 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 37 Directors’ ReportDirectors’ ReportCommittee Membership Dear Shareholder, As at the date of this report, the Company had an Audit Committee, a Remuneration, Nomination and Diversity Committee and a Risk, The Board, through its independent Remuneration, Nomination and Diversity Committee, reviews annually, the remuneration of the Remuneration Report (Audited) Safety, Environment and Community Committee of the Board of Directors. Members of the committees of the Board during the year were: Director James Mactier Fiona Morgan Steve Scudamore Lynda Burnett Russell Barwick Audit Committee and Community Committee and Diversity Committee Risk, Safety, Environment Remuneration, Nomination ✔ Chairperson ✔ Chairperson (from Mar 22) ✔ ✔ Chairperson (until Jan 22) ✔ Chairperson ✔ Directors’ Interests in the Shares and Options of the Company As at the date of this report, the interests of the directors in the shares of the Company increased by 111,029 from the holdings as at 30 June 2022 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 F Morgan S Scudamore L Burnett Auditor Independence and Non-Audit Services Number of ordinary shares 111,234 179,450 529,190 44,484 15,897 Company’s Key Management Personnel (KMP) and Non-Executive Directors (NED). It seeks to implement remuneration structures that are competitive, fair, transparent, non-discriminatory, and aligned with shareholder interests. KMP remuneration comprises both fixed and variable components and is significantly weighted towards the variable, at-risk components of Short-Term Incentives (STI) and Long-Term Incentives (LTI). Within the variable component, a greater emphasis is placed on LTI. Furthermore, most of the at-risk remuneration is awarded in the form of performance rights and has appropriate gateways, hurdles, timeframes, clawback rights and discretion. NED remuneration is on a fixed fee basis plus superannuation. NEDs are encouraged to purchase shares in the Company. The Company’s FY21 Remuneration Report, which included our intentions for FY22, received strong support from shareholders at the Annual General Meeting in November 2021. KMP Remuneration FY22 As foreshadowed in the FY21 report, the fixed component of KMP total fixed remuneration (TFR) was increased in FY22 to re-calibrate with our targeted market median level. We had dropped below this level due in part to our decision (supported by our KMP), not to increase salaries during the onset of the global pandemic in FY21, along with movement in the market since. The FY22 STI and LTI components of KMP remuneration included various changes from FY21 reflecting the Company’s short-term priorities and longer-term strategic goals, as well as recognising each KMP’s role and responsibilities. No changes were made to the overall STI and LTI percentage opportunities. Again, 50% of STI awarded to KMP for FY22 are intended to be issued in the form of 12-month performance rights, the other 50% in cash. Of particular note, in relation to STI: we broadened our safety-related key performance indicators (KPI) to include our All Injury Frequency Rate (AIFR); we included development of water use efficiency and carbon emission intensity targets and improvement plans, and; we added a personal performance component for each KMP. Performance against each KPI and consequent STI and LTI remuneration outcomes are detailed in this report. Continued alignment of KMP remuneration with shareholder interest was clearly demonstrated in FY22, a year in which Regis-specific During the year KPMG, the Group auditor, provided the following non-audit services. The directors are satisfied that the provision of but predominantly market-wide factors, saw the Company’s share price fall considerably. The percentage of potential STI awarded to non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The each KMP in FY22 was 54% to the MD/CEO and 44% to the COO. The deferred equity component of the FY21 awards (via 12-month nature and scope of each type of non-audit service provided means that auditor independence was not compromised. performance rights) were issued at a share price of $1.9975. Of the long-term performance rights issued in FY20, only 38% vested at KPMG Australia received or are due to receive the following amounts for the provision of audit and non-audit services: Audit and review of financial statements Assurance services Other advisory services $ 393,300 5,175 36,225 434,700 their final test date on 30 June 2022. FY23 An independent remuneration consultant was again engaged to provide benchmarking data and additional insights into remuneration structures, levels, and trends in the Australian mining sector. This data was sourced from annual reports published by a selection of ASX listed mining and mining service companies for the year ended 30 June 2021. The comparator list is larger and broader than the narrower gold producer peer group that we use for calculating relative TSR (used in LTI) as we recognise that our KMP (and NED) skills and experience are transferable across different commodities and sectors within the mining industry. From this report, combined with our own data and experience, it is very clear that employment in the mining industry continues to be very tight and competitive at all A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act is attached to the Directors’ levels. Report. Rounding off The Company is of a kind referred to in ASIC Instrument 2016/191 dated 24 March 2016 and in accordance with that Instrument, amounts in the Financial Statements and Directors’ Report have been rounded to the nearest thousand dollars, unless otherwise stated. For FY23, TFR increases of 5% for KMP have been agreed, consistent with our median industry target and significant inflation. The overall STI and LTI percentage opportunities remain the same. STI and LTI KPIs similar to FY22 have been utilised for KMP remuneration in FY23. A notable addition is the inclusion in STIs of KPIs relating to the rate of land rehabilitation and completing actions to improve carbon emission efficiencies and water reuse. The no-fatality and no catastrophic environmental incident gateways will again apply to 100% of KMP STI payments in FY23 as will the 12-month equity-linked deferral mechanism on 50% of any STI awarded. The Board retains the right to clawback previous payments made to KMP under circumstances involving fraud, misrepresentation, or malfeasance by KMP. 38 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 39 Directors’ ReportRemuneration Report (Audited) Non-Executive Director Remuneration Remuneration for NED is in the form of fixed fees (plus superannuation), set at levels which we believe are necessary and appropriate to attract and retain directors of the calibre, skills and experience we expect, recognising the workload and responsibility they have. As foreshadowed in the FY21 report, NED fees were increased in FY22 to align them with the targeted median market level (having not been increased since FY19). No change has been made for FY23 and the proposed aggregate of all NED fees (including superannuation) remains within the shareholder approved limit of $950,000. The individual performance and contribution of each NED and of the Board itself is reviewed annually by the Non-Executive Chairman. The above is not a complete list of changes to our remuneration arrangements. Full details are set out in the following report which I encourage you to read in its entirety. Steve Scudamore Chairman, Remuneration, Nomination and Diversity Committee This remuneration report for the year ended 30 June 2022 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. Key Management Personnel Details of KMPs of the Company and Group and their movements during the year ended 30 June 2022 are set out below: Name Position Term as KMP Non-executive directors J Mactier F Morgan S Scudamore L Burnett R Barwick Executive directors J Beyer Other executives S Gula J Latto T Bevan Non-Executive Chairman Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Full financial year Full financial year Full financial year Full financial year Resigned 14 January 2022 Chief Executive Officer and Managing Director Full financial year Chief Operating Officer Chief Financial Officer Full financial year Resigned 11 May 2022 Interim Chief Financial Officer Commenced 9 May 2022 Principles of Remuneration The Remuneration, Nomination and Diversity Committee is charged with formulating the Group’s remuneration policy, reviewing each director’s remuneration and reviewing the 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. The Company has implemented an Executive 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 and remuneration of the executive director and other KMP with the interests of shareholders and reflect Company strategy; • To provide competitive rewards to attract, retain and incentivise high calibre executives; • To be appropriate relative to others in the Company; • To be non-discriminatory; 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 FY22, the STI represented the annual component of the “at risk” reward opportunity which is payable 50% in cash and 50% in performance rights (which vest 12 months after the end of financial year) upon the successful achievement of 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 longer term “at risk” reward opportunity which takes the form of performance rights, subject to meeting predetermined performance and vesting conditions. Executive remuneration levels are reviewed at least annually by the Remuneration, Nomination and Diversity Committee. 40 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 41 Remuneration Report (Audited)The chart below provides a summary of the structure of executive remuneration in the 2022 financial year: Performance linked remuneration Fixed Remuneration Base salary + superannuation + benefits Variable Remuneration STI Plan LTI Plan Performance linked remuneration includes both STI and LTI and is designed to reward KMP for meeting or exceeding their KPIs. Short Term Incentive Under the current arrangements, executives have the opportunity to earn an annual incentive. The STI recognises and rewards annual performance. FY22 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. If Shareholders do not approve the proposed issue of the Performance Rights to the Chief Executive Officer and Managing Director the payment will be made in cash. How much can current In FY22, the Chief Executive Officer and Managing Director had a maximum STI opportunity of 70% of total executives earn? fixed remuneration (“TFR”), and other executives had a maximum STI opportunity of 60% of total fixed Cash and Performance Rights Performance Rights remuneration. Remuneration Mix – Target 14% LTI Chief Executive Officer and Managing Director 57% Fixed Remuneration 19% STI Other Executives 67% Fixed Remuneration 22% LTI 21% STI Elements of Remuneration in FY22 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 at least 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 May 2022, The Reward Practice Pty Ltd reviewed the existing remuneration arrangements of the Company’s KMPs and made recommendations to the Remuneration, Nomination and Diversity Committee. Fees to The Reward Practice Pty Ltd for this engagement totalled $6,000 exclusive of GST. 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 work-related fatality or catastrophic environmental event at any of the Company’s managed operations in that year. How is performance A combination of specific Company KPIs are chosen to reflect the core drivers of short term performance and measured? also to provide a framework for delivering sustainable value to the Group and its shareholders. The following KPIs were chosen for the 2022 financial year: Jim Beyer Stuart Gula Jon Latto KPI 1: Safety targets; • AIFR reduction; • LTIFR below industry benchmark; KPI 2: All in sustaining costs relative to guidance; KPI 3: Production relative to guidance; KPI 4: Environmental targets; • No significant environmental incidents • No significant compliance issues • Development of carbon emission and water use targets KPI 5: Resource Growth KPI 6: Individual Performance Targets 20% 20% 15% 15% 15% 20% 20% 20% 20% 20% 15% 15% 20% 10% 10% 10% 15% 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 within 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 If an executive is terminated for cause before the end of the financial year, no STI is awarded for that year. executive leaves? 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 In the event of a change of control, a pro-rata cash payment will be made based on assessment of is a change of control? performance up to the date of the change of control (subject to Board discretion). 42 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 43 Remuneration Report (Audited)Remuneration Report (Audited)Long Term Incentives Under the current arrangements, annual grants of performance rights are made to executives to align remuneration with the creation of shareholder value over the long-term. FY22 How is it paid? Executives are eligible to receive performance rights (being the issue of shares in Regis in the future). How much can current In FY22, the Chief Executive Officer and Managing Director had a maximum LTI opportunity of 100% of total executives earn? fixed remuneration, and other executives had a maximum LTI opportunity of 65% of total 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. How is performance The vesting of performance rights are subject to a number of vesting conditions. The performance rights measured? issued in FY22 are subject to the following vesting conditions: 1. Relative Total Shareholder Return (50%(i)) Performance against comparator group (ASX code: EVN, NST, PRU, RSG, SBM, WGX, NCM, OGC, SLR, GOR, RMS, WAF): Between 50th percentile and the 75th percentile will result in a straight-line pro-rata between 50% and 100% of Relative TSR performance rights vesting. Performance and Executive Remuneration Outcomes in FY22 Actual remuneration earned by executives in FY22 The actual remuneration earned by executives in the year ended 30 June 2022 is set out below. This provides shareholders with details of the remuneration actually paid to executives for performance in FY22 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 2022: Weighting Key Performance Indicator Jim Beyer Stuart Gula Jon Latto Metric Achievement KPI 1: Safety Targets 20% 20% 15% Reduction in key safety 50% award measures: • AIFR reduction • Reduction not achieved • LTIFR of 1.25 below • LTIFR below industry DMIRS rate for gold benchmark industry of 2.2. KPI 2: AISC KPI 3: Production 15% 15% 20% 20% 20% 15% AISC relative to guidance Threshold level not achieved Production relative to Threshold level not achieved guidance 2. Life of Mine Reserve Growth in Excess of Depletion (25%) KPI 4: Environmental Targets 20% 20% 15% Targets: 92% award Vesting will depend on the Company’s growth in ore reserves net of depletion over the three-year performance period. Growth in reserves can arise from M&A activity. If there are no new additions to Ore Reserves then nil vest. As new reserves are added from nil to 120% of depletion, this will result in a straight-line pro-rata between zero and 100% of the Reserve Growth performance rights vesting. 3. Production Growth (25%) Annualised gold production as at 30 June 2024 testing date (referencing the board approved budgeted gold production for FY25) exceeds the current approved Regis LOM Reserves plan (note this includes current plans for Duketon and Tropicana but excludes McPhillamys) by 20% or more for FY25. Growth in production can arise from M&A activity. When is performance The performance rights issued in FY22 have a three-year performance period with the vesting of the rights measured? tested as at 30 June 2024. Any performance rights that do not vest will lapse after testing. There is no re- testing of performance rights. What happens if Where an executive ceases to be an employee of any Group Company: executive leaves? 1. Due to termination for cause, then any unvested rights will automatically lapse on the date of the cessation of employment; or 2. 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 If a matter, event, circumstance or transaction occurs that the Board reasonably believes may lead to a is a change of control? change of control, the Board may in its discretion determine the treatment and timing 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. Are executives eligible Executives are not eligible to receive dividends on unvested performance rights. for dividends? (i) Represents the maximum award if stretch targets are met. • No significant • No significant environmental incidents environmental incidents • No significant compliance issues and no significant compliance issues • Development of carbon emission and water use targets and plans • Carbon emission and water use targets partially complete KPI 5: Resource Growth 20% 10% 15% Resource growth through 100% award discovery or acquisition • Resources increased by 1,860koz from December 2020 to December 2021 KPI 6: Individual 10% 10% 20% Specific individual 60% award Performance Targets targets and objectives that are focused on personal performance and organisational improvements that are commercially confidential Based on this assessment, the STI payments for FY22 to executives were recommended as detailed in the following table: Name Jim Beyer Stuart Gula Jon Latto Position Chief Executive Officer and Managing Director Chief Operating Officer Chief Financial Officer Achieved STI(i) of TFR STI Awarded(ii) Percentage % 54.3% 44.3% n/a(iii) % 38.0% 26.6% n/a(iii) $ 342,300 155,078 - (i) Achieved STI reflects the percentage of the maximum STI opportunity. (ii) Paid 50% in cash and 50% in performance rights which vest 12 months after the end of financial year. (iii) Mr Latto resigned from his position as Chief Financial Officer on 11 May 2022 and therefore was not eligible for FY22 STI rewards. 44 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 45 Remuneration Report (Audited)Remuneration Report (Audited)Performance against LTI measures Performance and Executive Remuneration Arrangements in FY23 LTI awards granted in FY22 will be subject to testing at the end of the three-year performance period on 30 June 2024. In November Subsequent to the end of the 2022 financial year, the Board resolved to set STI and LTI hurdles as follows for the 2023 financial year: 2021, after receiving approval from shareholders at the AGM, 450,564 performance rights were granted to Executive Director Mr Jim Beyer, 156,196 and 189,709 performance rights were granted to executives Mr Stuart Gula and Mr Jon Latto respectively under the Group’s Executive Incentive Plan (“EIP”). Mr Jon Latto resigned as an executive on 11 May 2022 and forfeited his LTI awards. Further details of the grant, including performance conditions and the calculation of fair value is disclosed in the Note 24 to the financial statements. LTI awards granted in FY21 will be subject to testing at the end of the three-year performance period on 30 June 2023. In November 2020, after receiving approval from shareholders at the AGM, 154,353 performance rights were granted to Executive Director Mr Jim Beyer, and 67,350 and 55,661 performance rights were granted to executives Mr Stuart Gula and Mr Jon Latto respectively under the Group’s EIP. Mr Jon Latto resigned as an executive on 11 May 2022 and forfeited his LTI awards. Further details of the grant, including performance conditions and the calculation of fair value is disclosed in the Note 24 to the financial statements. LTI awards granted in FY20 were subject to testing at the end of the three-year performance period on 30 June 2022. In November 2019, after receiving approval from shareholders at the AGM, 129,433 performance rights were granted to Executive Director Mr Jim Beyer and 58,343 performance rights were granted to Mr Jon Latto under the Group’s EIP. Mr Jon Latto resigned as an executive on 11 May 2022 and forfeited his LTI awards. Further details of the grant, including performance conditions and the calculation of fair value is disclosed in the Note 24 to the financial statements. A number of performance conditions determined the vesting of the performance rights. The outcome of these performance conditions as tested for the three-year period ended on 30 June 2022 were as follows: Performance Condition Weighting Metric Achievement Relative TSR 20% Relative Total Shareholder Return measured on Threshold level not achieved a sliding scale against a select peer group of comparator companies. (ASX code: EVN, NCM, NST, OGC, PRU, RSG, SAR, SBM, WGX, SLR, GOR, RMS) Absolute TSR EPS 20% 15% Absolute Total Shareholder Return. Threshold level not achieved Absolute Earnings Per Share measured against Threshold level not achieved a pre-determined target set by the Board (as an average across three 12-month periods) Reserves 15% Reserve growth in excess of depletion over the 100% award three-year vesting period. • 147% growth achieved McPhillamys 15% McPhillamys Project progress as determined by 50% award the Board. Production 15% Production growth above the life of mine plan. 100% award • Production for three year period above target of 1,146koz 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 directly 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. Revenue Net profit/(loss) after tax Basic earnings/(loss) per share (cents) Diluted earnings/(loss) per share (cents) 2022 $’000 1,015,943 13,775 1.8 1.8 2021 $’000 819,162 146,198 26.37 26.32 2020 $’000 756,657 199,517 39.26 39.18 2019 $’000 654,807 163,150 32.18 32.12 2018 $’000 606,495 174,231 34.60 34.35 Net assets 1,577,299 1,584,305 835,081 716,464 636,842 Component Links to FY23 Performance Total Fixed Remuneration (TFR) Salaries awarded effective 1 July 2022 are used as the basis for determining the value component for the FY23 STI and LTI. The maximum STI opportunity that each KMP can earn are: • Chief Executive Officer and Managing Director 70% • Other executives 60% The maximum LTI opportunity that each KMP can earn are: • Chief Executive Officer and Managing Director 100% • Other executives 65% Short Term Incentives The following KPIs were chosen for the 2023 financial year: (STI) KPI 1: Safety targets: • All Injury Frequency Rate: Jim Beyer Stuart Gula 20% 20% Incoming CFO 15% • Threshold: 5% reduction from 30 June 2022 level (0% awarded); • Target: 10% reduction from 30 June 2022 level (33% awarded); • Stretch: 15% reduction from 30 June 2022 level (100% awarded); • Pro-rated between each; • Total Recordable Injury Frequency Rate: • Threshold: 5% reduction from 30 June 2022 level (0% awarded); • Target: 10% reduction from 30 June 2022 level (33% awarded); • Stretch: 15% reduction from 30 June 2022 level (100% awarded); • Pro-rated between each; • Keep LTIFR below the most recently reported annual Department of Mines, Industry Regulation and Safety Reportable LTIs for the Gold Mining Industry (or equivalent if not available); KPI 2: All in sustaining costs relative to guidance: 15% 20% 20% • Adjusted for gold and fuel price: • Threshold: mid-point (0% awarded); • Stretch: at the bottom of range (100% awarded); • Pro-rated up from mid-point to bottom; KPI 3: Production relative to guidance; 15% 20% 15% • Threshold: mid-point (0% awarded); • Stretch: Stretch: 5% above mid-point (100% awarded); • Pro-rated up from mid-point to 5%; KPI 4: Environmental, social and governance targets: 20% 20% 15% • No significant environmental incidents; • No significant environmental compliance issues; • Increased rate of land rehabilitation; completing actions on water and carbon efficiency plans; 46 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 47 Remuneration Report (Audited)Remuneration Report (Audited)Component Links to FY23 Performance Short Term Incentives (STI) Jim Beyer Stuart Gula KPI 5: Resource growth through discovery (assessed potential 20% 10% or actual) or acquisition at the discretion of the Board; and Incoming CFO 15% KPI 6: Individual performance targets: 10% 10% 20% Specific individual targets and objectives that are focussed on personal performance and organisational improvements that are commercially confidential. The Board retains discretion to adjust the STI mechanism and amounts. Long Term Incentives The performance rights issued for FY23 will be subject to a three year vesting period and the following (LTI) vesting conditions: 1. Relative Total Shareholder Return (50%(i)) Performance against comparator group(ii): Between 50th percentile and the 75th percentile (i.e. 8th to 11th of 14 companies) will result in a straight- line pro-rata between 50% and 100% of Relative TSR performance rights vesting. 2. Life of Mine Reserve Growth in Excess of Depletion (25%) Vesting will depend on the Company’s growth in ore reserves net of depletion over the three-year performance period. If there are no new additions to Ore Reserves then nil vest. As new reserves are added from nil to 120% of depletion, this will result in a straight-line pro-rata between zero and 100% of the Reserve Growth performance rights vesting. Growth in reserves can arise from M&A activity. 3. Production Growth (25%) Annualised gold production as at 30 June 2025 testing date (referencing the then Board approved budget gold production for FY26) exceeds the current approved Regis LOM Base Case Plan by 20%. Growth in production can arise from M&A activity. (i) Represents the maximum award if stretch targets are met. (ii) The Comparator Group, for LTI purposes, from 1 July 2022, will comprise the following gold producers: 1. 2. 3. 4. 5. 6. 7. 8. 9. Evolution Mining Limited Northern Star Resources Limited Perseus Mining Limited Capricorn Metals Limited St Barbara Limited Newcrest Mining Limited Silver Lake Resources Limited Gold Road Resources Limited Ramelius Resources Limited 10. West African Resources 11. Westgold Resources Limited 12. Alkane Resources Limited 13. Red 5 Limited 14. Emerald Resources NL Service Contracts 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: Notice Period Payment in Lieu of Notice Rights on Termination Entitlement to Options and Employer initiated termination: • without reason 3 months plus 9 months’ salary 12 months • with reason Not less than 3 months Not less than 3 months • serious misconduct 0 – 1 month Employee initiated termination 3 months 0 – 1 month Not specified Change of control 1 month plus 12 months’ salary Not specified Options – 1 month to exercise, extendable at Board discretion Rights – refer to LTI details As above As above Mr Stuart Gula, the Company’s Chief Operating Officer, is employed under a contract with the following termination provisions: Notice Period Payment in Lieu of Notice Rights on Termination Entitlement to Options and Employer initiated termination: • without reason 3 months plus 9 months’ salary 12 months • with reason Not less than 3 months Not less than 3 months • serious misconduct 0 – 1 month Employee initiated termination 3 months 0 – 1 month Not specified Change of control 1 month plus 12 months’ salary Not specified Options – 1 month to exercise, extendable at Board discretion Rights – refer to LTI details As above As above Mr Tony Bevan, the Company’s Interim Chief Financial Officer, is employed under a fixed term contract expiring on 14 October 2022. The contract can be terminated immediately by the Company for reasons of serious misconduct. Mr Anthony Rechici, the Company’s incoming Chief Financial Officer, due to commence on 3 October 2022, will be employed under a contract with the following termination provisions: Notice Period Payment in Lieu of Notice Rights on Termination Entitlement to Options and Employer initiated termination: • without reason 3 months plus 9 months’ salary 12 months • with reason Not less than 3 months Not less than 3 months • serious misconduct 0 – 1 month Employee initiated termination 3 months 0 – 1 month Not specified Change of control 1 month plus 12 months’ salary Not specified Options – 1 month to exercise, extendable at Board discretion Rights – refer to LTI details As above As above If, in the opinion of the board a KMP acts fraudulently or dishonestly, is in material breach of their obligations to the Company, is knowingly involved in a material misstatement of financial statements or engages in behaviour that results in the satisfaction of vesting conditions in circumstances that in the reasonable opinion of the board have caused or are likely to cause long term detriment to the Company, then regardless of whether or not the KMPs employment with the Company has terminated, the Board may: (i) deem any unexercised incentives of the KMP to have lapsed; (ii) adjust the KMPs current or future performance-based remuneration; and (iii) take any other action that the board considers appropriate, including requiring any benefits obtained under an Executive Incentive Plan by the KMP or their nominee to be returned, repaid or cancelled or alter the outcome on them vesting. 48 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 49 Remuneration Report (Audited)Remuneration Report (Audited)Non-Executive Directors Table 3: Annual Non-Executive Director fees as at 30 June 2022 Total remuneration for all non-executive directors, last voted upon by shareholders at the 2019 AGM, is not to exceed $950,000 per annum including superannuation. In FY22, total non-executive directors’ fees paid were $742,734 per annum including 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. Key Management Personnel Remuneration Table 1: Remuneration for the year ended 30 June 2022 Post Employ- Long-term Share- based Short Term ment benefits Payment Non- Accrued annual & Termin- Salary & Cash Monetary Super- long service Options & ation Perfor- mance Fees Rewards Benefits* annuation leave# Rights+ payments Total Related 2022 $ Non-executive directors J Mactier(i) F Morgan(ii) 190,000 125,156 S Scudamore(iii) 152,500 L Burnett(iv) R Barwick(v) 137,500 70,056 Executive directors $ - - - - - $ - - - - - $ 19,000 12,516 15,250 13,750 7,006 $ - - - - - $ - - - - - J Beyer 780,419 171,150 4,850 81,818 93,224 538,878 $ - - - - - - - $ % 209,000 137,672 167,750 151,250 77,062 - - - - - 1,670,339 42.51% 920,395 31.33% Other executives S Gula J Latto T Bevan Total 537,810 77,539 348,437 72,000 - - 4,850 4,850 - 35,333 37,697 - 54,050 210,813 23,779 - - - 51,353 466,116 - 72,000 - - 2,413,878 248,689 14,550 222,370 171,053 749,691 51,353 3,871,584 * # + 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. Rights have vested during the year for KMPs as detailed in Table 5. Table 5 reflects the realised benefits of share-based payments for the year. (i) Mr Mactier’s fees of $190,000 per annum are inclusive of all committee fees for roles on the committees shown in Table 2 below. (ii) Mrs Morgan’s fees include $10,156 for her roles on the committees shown in Table 2 below. (iii) Mr Scudamore’s fees include $37,500 for his roles on the committees shown in Table 2 below. (iv) Mrs Burnett’s fees include $22,500 for her roles on the committees shown in Table 2 below. (v) Mr Barwick’s fees include $8,083 for his roles on the committees shown in Table 2 below. Table 2: Committee membership from 1 July 2021 to 30 June 2022 Director James Mactier Fiona Morgan Steve Scudamore Lynda Burnett Russell Barwick(i) Audit Committee and Community Committee and Diversity Committee Risk, Safety, Environment Remuneration, Nomination ✔ Chairperson ✔ Chairperson(ii) ✔ ✔ Chairperson(ii) ✔ Chairperson ✔ (i) Mr Barwick resigned from the Board on 14 January 2022. (ii) Mrs Morgan became Chairperson of the Risk, Safety, Environment and Community Committee following Mr Barwick’s resignation from the Board. Director James Mactier(i) Fiona Morgan Steve Scudamore Lynda Burnett Total Base Fee(ii) Committee Fees 190,000 115,000 115,000 115,000 535,000 - 15,000 37,500 22,500 75,000 Total 190,000 130,000 152,500 137,500 610,000 (i) Mr Mactier’s fees are inclusive of all committee fees. (ii) Base fees are exclusive of superannuation. (iii) Committee membership fees are $7,500 per committee or $15,000 for the committee Chairperson. Table 4: Remuneration for the year ended 30 June 2021 Post Employ- Long-term Share- based Short Term ment benefits Payment Non- Accrued annual & Termin- Salary & Cash Monetary Super- long service Options & ation Perfor- mance Fees Rewards Benefits* annuation leave# Rights+ payments Total Related 2021 $ Non-executive directors J Mactier(i) F Morgan(ii) 160,000 115,000 S Scudamore(iii) 135,000 L Burnett(iv) R Barwick(v) 125,000 122,000 Executive directors $ - - - - - $ - - - - - $ 15,200 10,925 12,825 11,875 11,590 $ - - - - - $ - - - - - J Beyer 671,084 179,610 3,739 68,495 59,037 470,842 Other executives S Gula J Latto Total 470,969 95,396 387,692 85,410 3,739 3,739 45,980 38,000 41,957 91,814 35,081 158,977 2,186,745 360,416 11,217 214,890 136,075 721,633 $ - - - - - - - - - $ % 175,200 125,925 147,825 136,875 133,590 - - - - - 1,452,807 44.77% 749,855 24.97% 708,899 34.47% 3,630,976 * # + 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. (i) Mr Mactier’s fees of $160,000 per annum are inclusive of all committee fees. (ii) Mrs Morgan’s fees include $5,000 for her roles on committees. (iii) Mr Scudamore’s fees include $25,000 for his roles on committees. (iv) Mrs Burnett’s fees include $15,000 for her roles on committees. (v) Mr Barwick’s fees include $12,000 for his roles on committees. 50 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 51 Remuneration Report (Audited)Remuneration Report (Audited)Table 5: Voluntary information – Non-IFRS – Remuneration received by executives for the year ended 30 June 2022 Table 6: Rights and options over equity instruments granted as compensation The amounts disclosed below as executive KMP remuneration for 2022 reflect the realised benefits received by each KMP during the All rights and options refer to rights and options over ordinary shares of Regis Resources Limited, which are exercisable on a one-for- reporting period. The remuneration values disclosed below have been determined as follows: one basis. Fixed remuneration There were no options granted to KMPs as compensation during the current year. 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. 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 as follows: 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 Rights the current financial year. The value of vested performance rights was determined based on a 5-day VWAP including the date of issue. These performance rights are in relation to the 2020 financial year and were issued in July 2021. Long-term incentives The value of vested performance rights was determined based on a 5-day VWAP including the date of issue. These performance rights were granted in the 2019 financial year and subject to testing at the end of the three-year performance period on 30 June 2021. The Granted Fair Value at Number of rights to year year % Vested % Forfeited during the during the Incentives Grant Date Grant Date Test Date J Beyer J Latto(ii) S Gula Short Term Incentives 12 month service 26 Nov 20 $3.67 1 Jul 21 37,816 18,208 11,565 100% - condition shares were issued in October 2021. 12 month service 25 Nov 21 $1.89 1 Jul 22 89,917 42,758 47,758 - 24% Director Executive directors J Beyer Other executives S Gula J Latto T Bevan Fixed Awarded STI Awarded STI Remuneration $ (cash) $ (shares) Awarded LTI Total Value $ $ $ 904,850 179,610 93,148 124,646 1,302,254 592,263 470,869 72,000 95,396 85,410 - 28,487 44,850 - - - - 716,146 601,129 72,000 Total executive KMP 2,039,982 360,416 166,485 124,646 2,691,529 Non-executive directors 742,734 - - - 742,734 Total KMP remuneration 2,782,716 360,416 166,485 124,646 3,434,263 The amounts disclosed above are not the same as the remuneration expensed in relation to each KMP in accordance with the accounting standards ($3,871,584 for 2022, 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 but does not reflect the fair value of the equity instruments when they are actually received by the KMPs. condition(i) Long Term Incentives Relative TSR Absolute TSR 26 Nov 19 26 Nov 19 Earnings per share 26 Nov 19 Ore reserves McPhillamys 26 Nov 19 26 Nov 19 Production growth 26 Nov 19 Relative TSR Ore reserves McPhillamys Relative TSR Ore reserves McPhillamys 25 Nov 20 25 Nov 20 25 Nov 20 25 Nov 21 25 Nov 21 25 Nov 21 $1.73 $1.05 $4.17 $4.17 $4.17 $4.17 $1.85 $3.43 $3.43 $0.93 $1.78 $1.78 30 Jun 22 25,887 11,669 30 Jun 22 25,887 11,669 30 Jun 22 19,415 30 Jun 22 19,415 30 Jun 22 19,415 30 Jun 22 19,414 8,751 8,751 8,751 8,752 - - - - - - 30 Jun 23 77,177 27,831 33,675 30 Jun 23 38,588 13,915 16,838 30 Jun 23 38,588 13,915 16,838 30 Jun 24 225,282 78,098 94,855 30 Jun 24 112,641 39,049 47,427 30 Jun 24 112,641 39,049 47,427 862,083 331,166 316,383 0% 0% 0% 69% 34% 69% - - - - - - 100% 100% 100% 31% 66% 31% 20% 20% 20% 20% 20% 20% Value of rights granted during the year $780,457 $292,458 $347,318 (i) 50% of the STI’s for the year ended 30 June 2021 was paid in performance rights which vested 12 months after the end of the financial year. • The statutory remuneration shows benefits before they are actually received by the KMPs, noting that some components of the (ii) Mr Jon Latto resigned as an executive on 11 May 2022 and forfeited all unvested STI and LTI awards remuneration may not be received at all. • 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. In relation to the performance rights granted in November 2019, the three year performance period during which the performance rights were tested ended on 30 June 2022. Any performance rights which did not vest lapsed after testing. There is no re-testing of performance rights. In relation to the performance rights granted in November 2020 and November 2021, there is a three year performance period which ends on 30 June 2023 and 30 June 2024, respectively. 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 21. 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 2021 to 30 June 2024). 116,126 performance rights vested during the year. 52 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 53 Remuneration Report (Audited)Remuneration Report (Audited)Auditor’s Independence Declaration Table 7: 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 Granted as Held at end of period 30 June Vested at 30 June 2022 Not 1 July 2021 remuneration Exercised Forfeited 2022 Total Exercisable exercisable Rights J Beyer J Latto S Gula 482,368 132,212 78,915 540,480 (97,693) (100,889) 824,266 48,537 48,537 198,953 (18,208) (312,957) - 237,467 (11,565) - 304,817 - - - - - - - There were no options granted to KMPs during the year. Table 8: 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 KMP, including their related parties, is as follows: Non-executive directors J Mactier F Morgan S Scudamore L Burnett R Barwick Executive directors J Beyer Other executives S Gula J Latto Total Held at On exercise of Net change Held at 1 July 2021 options/rights other 30 June 2022 66,234 529,190 34,484 15,897 5,000 - - - - - 80,605 97,693 4,692 - 736,102 11,565 18,208 127,466 45,000 - 10,000 - (5,000)(i) - - (18,208)(ii) 31,792 111,234 529,190 44,484 15,897 - 178,298 16,257 - 895,360 (i) Mr Barwick resigned from the Board on 14 January 2022 and was no longer a KMP at 30 June 2022. (ii) Mr Latto resigned from his position as Chief Financial Officer on 11 May 2022 and was no longer a KMP at 30 June 2022. 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 2022, services totalling $78,043 (2021: $529,793) have been provided on normal commercial terms to the Group by Mintrex Pty Ltd. Mrs Morgan was Managing Director and Chief Executive Officer of Mintrex until 30 September 2021 and was a member of the Board of Mintrex until 30 June 2022. She remains a shareholder. The balance outstanding at 30 June 2022 was $1,154 exclusive of GST. Other than the ordinary accrual of personnel expenses at balance date and transactions disclosed above, there are no other amounts receivable from and payable to key management personnel and their related parties. Signed in accordance with a resolution of the directors. Mr James Mactier Non-Executive Chairman Perth, 24 August 2022 54 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 55 Remuneration Report (Audited) KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. 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 2022 there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit. iii. KPMG Derek Meates Partner Perth 24 August 2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. 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 2022 there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit. iii. KPMG Derek Meates Partner Perth 24 August 2022 Financial Statements Consolidated Statement of Comprehensive Income 57 Consolidated Balance Sheet Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Financial Statements Directors’ Declaration Independent Auditor’s Report 58 59 60 61 97 98 Consolidated Statement of Comprehensive Income For the year ended 30 June 2022 Revenue Cost of goods sold Gross profit Other income/(expenses) Personnel costs Investor and corporate costs Occupancy costs Other administrative expenses Impairment of non-current assets Finance costs Profit before tax Income tax expense Profit from continuing operations Profit attributable to members of the parent Other comprehensive income Other comprehensive (loss)/income for the period, net of tax Total comprehensive income for the period Note 2 3 2 3 12 18 5 Consolidated 2022 $’000 2021 $’000 1,015,943 819,162 (945,524) (582,659) 70,419 236,503 (1,912) (402) (15,933) (8,060) (1,365) (1,379) (11,117) (11,210) 19,443 (5,668) 13,775 13,775 (14,608) (4,687) (767) (770) (610) (2,265) 212,394 (66,196) 146,198 146,198 - - 13,775 146,198 Total comprehensive income attributable to members of the parent 13,775 146,198 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 4 4 1.83 1.82 26.37 26.32 (cents per share) The above statement of comprehensive income should be read in conjunction with the accompanying notes. 56 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 57 Remuneration Report (Audited)Consolidated Balance Sheet As at 30 June 2022 Consolidated Statement of Changes in Equity For the year ended 30 June 2022 Consolidated 2022 $’000 Note Current assets Cash and cash equivalents Receivables Current tax assets 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 Right-of-use assets Total non-current assets Total assets Current liabilities Trade and other payables Income tax payable Provisions Lease liabilities Total current liabilities Non-current liabilities Deferred tax liabilities Long term borrowings Provisions Lease liabilities Total non-current liabilities Total liabilities Net assets Equity Issued capital Reserves Retained profits Total equity 7 8 9 19 9 10 12 13 14 11 16 17 11 23 18 17 11 21 21 2021 $’000 242,627 14,832 - 207,354 13,092 8,139 141,033 161,475 183 2,635 183 4,398 372,436 423,515 213,132 324,442 509,104 114,998 736,118 2,301 56,741 185,643 335,618 491,702 18,655 794,640 2,688 60,704 1,956,836 2,329,272 1,889,650 2,313,165 151,339 151,348 - 4,903 28,202 184,444 125,314 295,883 119,687 26,645 567,529 751,973 325 5,975 24,481 182,129 113,624 293,821 103,921 35,365 546,731 728,860 1,577,299 1,584,305 1,096,575 1,095,533 35,961 444,763 35,157 453,615 1,577,299 1,584,305 Consolidated Share-based Financial Retained profits/ Note Issued capital $’000 1,095,533 payment reserve $’000 33,440 assets reserve $’000 1,717 At 1 July 2021 Profit for the period Other comprehensive income 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 Dividends reinvested Issued capital Shares issue transaction costs 24 6 21 - - - - - 1,046 - (4) - - - 804 - - - - - - - - - - - - (accumulted losses) Total equity $’000 $’000 453,615 1,584,305 13,775 13,775 - - 13,775 13,775 - 804 (22,627) (22,627) - - - 1,046 - (4) At 30 June 2022 1,096,575 34,244 1,717 444,763 1,577,299 435,145 29,506 1,717 368,713 835,081 At 1 July 2020 Profit for the period Other comprehensive income 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 Dividends reinvested Issued capital 24 6 10,206 21 659,776 Shares issue transaction costs (9,594) - - - - - - - - 3,934 - - - - - - - - - - - - 146,198 146,198 - - 146,198 146,198 - 3,934 (61,296) (61,296) - - - 10,206 659,776 (9,594) At 30 June 2021 1,095,533 33,440 1,717 453,615 1,584,305 The above statement of changes in equity should be read in conjunction with the accompanying notes. The above balance sheet should be read in conjunction with the accompanying notes. 58 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 59 Consolidated Statement of Cash Flows For the year ended 30 June 2022 Notes To The Financial Statements Consolidated 2022 $’000 2021 $’000 Note 1,015,698 790,619 (658,972) (435,767) 279 (7,567) (2,444) 459 (1,900) (77,125) 276,286 Cash flows from operating activities Receipts from gold sales Payments to suppliers and employees Interest received Interest paid Income tax paid Net cash from operating activities 7 346,994 Cash flows from investing activities Acquisition of property, plant and equipment Proceeds on disposal of property, plant and equipment Payments for exploration and evaluation Payments for acquisition of assets (net of cash acquired) Payments for acquisition of exploration 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 Net proceeds from borrowings Payment of lease liabilities Net cash generated/(used) in financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at 1 July Cash and cash equivalents at 30 June (46,558) (21,139) - (56,246) - - (98,232) 38 (43,899) (885,001) (1,036) (8,050) (120,886) (129,598) (321,922) (1,088,685) - (7,739) (21,580) - (31,026) (60,345) (35,273) 242,627 207,354 650,026 (9,594) (51,089) 293,652 (20,397) 862,598 50,199 192,428 242,627 22 21 6 18 7 The above statement of cash flows should be read in conjunction with the accompanying notes. Basis of preparation Performance for the year 1. Segment Information 2. Revenue and Other Income 3. Expenses 4. Earnings per Share 5. Current Income Tax 6. Dividends 7. Cash and Cash Equivalents Operating assets and liabilities 8. Receivables 9. Inventories 10. Property, Plant and Equipment 11. AASB 16 Leases 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 62 63 63 65 66 67 68 68 69 70 70 70 71 72 74 75 76 78 78 79 Capital structure, financial instruments and risk 18. Net Debt and Finance Costs 19. Financial Assets 20. Financial Risk Management 21. Issued Capital and Reserves Other disclosures 22. Tropicana Gold Project Asset Acquisition 23. Deferred Income Tax 24. Share-based Payments 25. Related Parties 26. Parent Entity Information 27. Commitments 28. Contingencies 29. Auditor’s Remuneration 30. Subsequent Events 31. New Accounting Standards and Interpretations 80 80 81 82 84 85 85 86 88 93 94 94 94 95 95 96 60 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 61 Notes to the Financial Statements (continued) For the year ended 30 June 2022Notes to the Financial Statements For the year ended 30 June 2022 Basis of preparation 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 24 August 2022. 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 2021. Refer to Note 31 for further details; • does not early adopt Accounting Standards and Interpretations that have been issued or amended but are not yet effective, unless otherwise stated. Refer to Note 31 for further details. Principles of consolidation The consolidated financial statements comprise the financial statements of the Group. A list of controlled entities (subsidiaries) at year end is contained in Note 25. 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. Note 3 Note 9 Note 12 Note 14 Note 15 Note 17 Note 23 Note 24 Expenses Inventories Exploration and evaluation assets Mine properties Impairment Provisions Deferred income tax Share-based payments Page xx Page xx Page xx Page xx Page xx Page xx Page xx Page xx 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. The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting Performance for the year 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 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 three reportable segments which comprise the Duketon Gold Project; being Duketon North Operations (“DNO”), currently comprising Moolart Well, Gloster, Both the functional currency of each entity within the Group and the Group’s presentation currency is Australian dollars. Anchor and Dogbolter-Coopers open-pits, and Duketon South Operations (“DSO”), currently incorporating Garden Well (open-pit and 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. underground), Rosemont (open-pit and underground), Erlistoun, Tooheys Well and Baneygo open-pits; and the Tropicana Gold Project. In the prior year, Regis acquired a 30% interest in the Tropicana Gold Project. Tropicana is operated by joint venture partner AngloGold Ashanti Australia Limited and currently comprises the Havana and Boston Shaker open-pits and the Boston Shaker and Tropicana underground mines. Unallocated items comprise corporate administrative costs (including personnel costs, share based payments, occupancy costs and investor and corporate costs), interest revenue, finance costs, net gains and losses on derivatives, exploration and evaluation assets relating to areas of interest where an economically recoverable reserve is yet to be delineated, cash, derivative assets and income tax assets. Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, conduct exploration and evaluation activities (excluding Tropicana due to it being managed by the joint venture partner) and develop mine properties. 62 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 63 Notes to the Financial Statements (continued) For the year ended 30 June 2022Impairment of non-current assets Depreciation and Depreciation capitalised Total depreciation and amortisation recognised in the statement of comprehensive income Segment result Segment net operating profit/ 1. Segment Information (continued) 2. Revenue and Other Income/(Expenses) The following table presents financial information for reportable segments for the years ended 30 June 2022 and 30 June 2021: Duketon North Duketon South Operations Operations Tropicana(*) Unallocated Total Continuing Operations 2022 $’000 2021 $’000 2022 $’000 2021 $’000 2022 $’000 2021 2022 $’000 $’000 2021 $’000 2022 $’000 2021 $’000 Segment revenue Sales to external Accounting Policies Gold sales The Group recognises revenue from gold sales when it satisfies the performance obligation of transferring control of gold inventory to the customer. The Group’s assessment is that this generally occurs when the sales contract has been entered into and the customer has physical possession of the gold, as this is the point at which the customer obtains the ability to direct the use and obtains substantially all of the remaining benefits of ownership of the asset. The transaction price is determined based on the agreed upon price and the number of ounces delivered. Payment is due upon delivery into the sales contract. customers 156,799 186,507 551,327 590,396 307,572 41,932 - - 1,015,698 818,835 Interest Other revenue - - - - - - 245 327 245 327 Interest income from cash at bank is recognised as it accrues using the effective interest method. Total segment revenue 156,799 186,507 551,327 590,396 307,572 41,932 245 327 1,015,943 819,162 Total revenue per the statement of comprehensive income 1,015,943 819,162 Interest expense 185 431 593 668 8,905 780 66 21 9,749 1,900 Revenue Gold sales Interest Gold forward contracts amortisation 36,052 38,837 170,760 128,152 86,523 21,641 1,589 1,131 294,924 189,761 - - - - 10,822 - 295 610 11,117 610 As part of the risk management policy, the Group has entered into gold forward contracts to manage the gold price of a proportion of Consolidated 2022 $’000 2021 $’000 1,015,698 818,835 245 327 1,015,943 819,162 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 (336) (712) delivered to MBL or its agent. Open contracts at balance date are summarised in the table below: 294,588 189,049 Continuing Operations ounces ounces 2022 2021 2022 $/oz 2021 $/oz 2022 $’000 2021 $’000 2022 $’000 2021 $’000 Within one year: - Flat forward contracts 100,000 100,000 1,571 1,571 157,114 157,114 (107,180) (79,142) Gold for physical Contracted gold Value of delivery sale price committed sales Mark-to-market Later than one year but not later than five years: - Flat forward contracts 120,000 220,000 1571 1,571 188,537 345,651 (134,693) (176,131) 220,000 320,000 345,651 502,765 (241,873) (255,273) (loss) before tax (14,015) 52,690 25,463 174,634 33,338 6,152 (25,343) (21,082) 19,443 212,394 Segment assets Segment assets at balance date 156,734 118,826 632,129 574,472 1,009,097 1,043,360 531,312 576,507 2,329,272 2,313,165 Mark-to-market has been calculated with reference to the following spot price at period end $2,616/oz $2,362/oz Capital expenditure for the year 58,357 40,902 128,301 103,462 105,376 15,447 26,365 49,533 318,399 209,344 (*) The Group has a 30% interest in the Tropicana Gold Project (Tropicana) which is an unincorporated joint venture operated by AngloGold Ashanti Australia Limited. The Group has determined it does not have control or joint control over Tropicana. Regis has the rights to its 30% interest share of gold produced by the joint venture and recognises its share of the assets and liabilities in accordance with its 30% interest consistent with the Group’s accounting policies. Other income/(expenses) Rehabilitation provision adjustment Rental income Other income Other expenses Consolidated 2022 $’000 2021 $’000 (1,855) (534) 114 1 (172) (1,912) 50 68 14 (402) 64 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 65 Notes to the Financial Statements (continued)For the year ended 30 June 2022Notes to the Financial Statements (continued) For the year ended 30 June 20223. Expenses Accounting Policies Cash costs of production Cash costs of mining and processing (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 inventories for ore stockpiles, gold in circuit and consumables. Cost of goods sold Cash costs of mining and processing Royalties Depreciation of mine plant and equipment Amortisation of mine properties Write-down of inventory ore stockpiles Inventory increases of bullion on hand Depreciation Consolidated 2022 $’000 2021 $’000 539,625 350,999 43,749 86,935 38,791 71,016 206,853 117,632 74,198 (5,836) 4,346 (125) 945,524 582,659 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 run of mine ore included in the life of mine plan for 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 or ore mined as appropriate. Depreciation of non-mine specific plant and equipment 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 • Buildings and infrastructure: 3 – 10 years • Leasehold improvements: 10 years Depreciation methods, useful lives and residual values are reviewed at each reporting date. 3. Expenses (continued) Employee benefits (personnel) costs Wages and salaries Defined contribution superannuation expense Share-based payments expense Employee bonuses Payroll tax payments Other employee benefits expense (including FBT) Less: Amounts capitalised to projects Employee benefits expense recognised in the statement of comprehensive income Amounts included within cost of goods sold Amounts included within personnel costs Total 4. Earnings per Share Accounting Policy Note 24 Consolidated 2022 $’000 2021 $’000 58,166 48,985 5,625 804 2,022 3,603 1,435 71,655 (10,402) 4,580 3,934 869 3,181 (20) 61,529 (8,686) 61,253 52,843 45,320 15,933 61,253 38,235 14,608 52,843 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. Consolidated 2022 $’000 2021 $’000 Amortisation Earnings used in calculating EPS Mine properties are amortised on a unit-of-production basis over the run of mine ore included in the life of mine plan for the mine Net profit attributable to ordinary equity holders of the parent 13,775 146,198 concerned. Depreciation and amortisation Depreciation expense Amortisation expense Less: Amounts capitalised to exploration projects Consolidated 2022 $’000 88,071 206,853 (336) 2021 $’000 72,129 117,632 (712) Depreciation and amortisation charged to the statement of comprehensive income 294,588 189,049 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 run of mine ore 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. 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 Weighted average number of ordinary shares adjusted for the effect of dilution No. shares No. shares (’000s) (’000s) 754,141 485 754,626 1,098 755,724 508,180 46,233 554,413 - 990 555,403 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. 66 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 67 Notes to the Financial Statements (continued)For the year ended 30 June 2022Notes to the Financial Statements (continued) For the year ended 30 June 20225. Current Income Tax Accounting Policy Current tax 7. Cash and Cash Equivalents Accounting Policy Cash and cash equivalents Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the Cash and cash equivalents in the balance sheet comprise cash at bank and in hand. Cash at bank earns interest at floating rates based reporting date, and any adjustment to tax payable in respect of previous years. on daily bank deposit rates. The major components of income tax expense are: Current income tax Current income tax expense Deferred income tax Relating to the origination and reversal of temporary differences Income tax expense reported in the statement of comprehensive income 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% (2021: 30%) Share-based payments Other non-deductible items Adjustment in respect of income tax of previous years Income tax expense reported in the statement of comprehensive income 6. Dividends Declared and paid during the year: Dividends on ordinary shares Final franked dividend for 2021: 3 cents per share (2020: 8 cents per share) Interim franked dividend for 2022: nil (2021: 4 cents per share) Consolidated 2022 $’000 2021 $’000 (6,021) 65,941 11,689 5,668 255 66,196 19,443 5,833 241 16 (422) 5,668 212,394 63,718 1,180 6 1,292 66,196 Consolidated 2022 $’000 2021 $’000 22,627 - 22,627 40,814 20,482 61,296 Proposed by the directors after balance date but not recognised as a liability at 30 June: Dividends on ordinary shares Final dividend for 2022: 2 cents per share (2021: 3 cents per share) 15,097 22,624 Dividend franking account Amount of franking credits available to shareholders of Regis Resources Limited for subsequent financial years 93,415 101,391 The ability to utilise the franking credits is dependent upon the ability to declare dividends. At 30 June 2022, the Group had no undrawn, committed borrowing facilities available (2021: nil). Refer to Note 18. Cash and cash equivalents in the balance sheet and cash flow statement Cash at bank and on hand Consolidated 2022 $’000 207,354 207,354 2021 $’000 242,627 242,627 Restrictions on cash The Group is required to maintain a minimum cash balance of $50 million in its Proceeds Account with Macquarie Bank Limited. The Group is required to maintain $604,000 (2021: $504,000) on deposit to secure bank guarantees in relation to the Perth office leases and two office leases in NSW. The amounts will be held for the terms of the leases. 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 Share-based payments Rehabilitation provision adjustment Depreciation and amortisation Changes in assets and liabilities (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 Note 15 17 Consolidated 2022 $’000 2021 $’000 13,775 146,198 11,117 1,461 124 804 1,856 294,588 1,740 (7,047) 1,763 (325) 2,610 11,690 12,838 610 365 (21) 3,934 534 189,049 (1,084) (58,076) (1,479) (7,145) 7,229 (3,783) (45) 346,994 276,286 68 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 69 Notes to the Financial Statements (continued)For the year ended 30 June 2022Notes to the Financial Statements (continued) For the year ended 30 June 2022Operating assets and liabilities 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 in note 18. 8. 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 only material receivables at year end are for GST and fuel tax credits receivable from the Australian Taxation Office and therefore, the Group’s exposure to credit risk in relation to its receivables is not material. Due to the short-term nature of these receivables, their carrying value is assumed to approximate fair value. Current Gold awaiting settlement GST receivable Fuel tax credit receivable Security deposits for land acquisition Interest receivable Dividend trust account Other receivables 9. Inventories Accounting Policy Consolidated 2022 $’000 - 8,455 1,443 2,350 95 623 126 13,092 2021 $’000 3,402 6,804 2,730 160 14 698 1,024 14,832 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. Bullion on hand is predominantly dore held at the refinery which is in the process of being refined into gold bars and dore held at site which is about to be shipped to the refinery. Bullion also includes gold bars held for sale. Dore is readily refinable into gold bars and saleable for cash within a 10 day period. 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. 9. Inventories (continued) 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 it’s 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. 10. 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. Freehold Leasehold Plant & Furniture & Buildings & Capital Land Improvements Equipment Equipment Infrastructure WIP Consolidated $’000 $’000 $’000 Net carrying amount at 1 July 2021 55,406 554 164,072 Additions 4,933 - 18,343 Depreciation expense Transfers between classes Rehabilitation provision adjustments Disposals - - - - (242) (39,088) - - - 1,382 17,655 (206) $’000 1,792 496 (882) 400 - (1) $’000 $’000 Total $’000 102,702 11,092 335,618 995 20,501 45,268 (28,318) - (68,530) 2,740 (4,522) - (5,362) - - - 12,293 (207) Net carrying amount at 30 June 2022 60,339 312 162,158 1,805 72,757 27,071 324,442 At 30 June 2022 Cost 60,339 1,882 406,876 5,300 209,742 27,071 711,210 Accumulated depreciation - (1,570) (244,718) (3,495) (136,985) - (386,768) Inventories expected to be sold (or consumed in the case of stores) within 12 months after the balance sheet date are classified as Net carrying amount 60,339 312 162,158 1,805 72,757 27,071 324,442 current assets, all other inventories are classified as non-current. Current Bullion on hand Ore stockpiles Gold in circuit Consumable stores Non-current Consolidated 2022 $’000 14,562 82,617 25,536 18,318 141,033 2021 $’000 8,726 106,854 32,427 13,468 161,475 Ore stockpiles (after write-down to net realisable value) 213,132 185,643 At 30 June 2022, all inventories were carried at cost except for a portion of the Duketon and Tropicana ore stockpiles written back to net realisable value resulting in an expense totalling $48,264,000 and $25,934,000 respectively being recognised in cost of goods sold. At 30 June 2021, all inventories were carried at cost except for a portion of the Duketon current ore stockpiles written back to net realisable value resulting in an expense totalling $4,346,000 being recognised in cost of goods sold. Net carrying amount at 1 July 2020 52,027 804 84,472 1,364 92,397 30,612 261,676 Acquisition – Tropicana Gold Project (Refer Note 22) Additions Depreciation expense Transfers between classes Rehabilitation provision adjustments Disposals - 3,379 - - - - - 4 95,598 4,423 564 379 11,403 2,635 110,200 2,377 8,140 18,702 (254) (20,892) (530) (33,354) - (55,030) - - - 485 35 (49) 17 - (2) 29,793 (30,295) 86 - - - (0) 121 (51) Net carrying amount at 30 June 2021 55,406 554 164,072 1,792 102,702 11,092 335,618 At 30 June 2021 Cost 55,406 1,882 370,752 4,410 219,536 11,092 663,078 Accumulated depreciation - (1,328) (206,680) (2,618) (116,834) - (327,460) Net carrying amount 55,406 554 164,072 1,792 102,702 11,092 335,618 70 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 71 Notes to the Financial Statements (continued)For the year ended 30 June 2022Notes to the Financial Statements (continued) For the year ended 30 June 202211. AASB 16 Leases Accounting Policy The nature of the Group’s leasing activities includes service contracts for mining services, drilling, haulage, and power generation contracts. Additionally, office leases and office equipment have also been included. At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in AASB 16. Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of- use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: • Fixed payments (including in-substance fixed payments), less any lease incentives receivable. • Variable lease payments that are based on an index or a rate. • Amounts expected to be payable by the lessee under residual value guarantees. • The exercise price of a purchase option if the lessee is reasonably certain to exercise that option. • Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. Right-of-use assets are measured at cost comprising the following: • The amount of the initial measurement of the lease liability. • Any lease payments made at or before the commencement date less any lease incentives received. • Any initial direct costs. • Any restoration costs. The right-of-use asset is subsequently depreciated using the straight-line method. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for remeasurements of the lease liability. Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets are assets with a replacement value of less than $5,000. 11. AASB 16 Leases (continued) Right-of-use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the balance sheet as at 30 June 2022. Consolidated As at As at 30 June 2022 30 June 2021 Plant & equipment Furniture & equipment Buildings & infrastructure Total right-of-use assets Right-of-Use Assets Balance at 1 July 2021 Depreciation charge for the year Additions to right-of-use assets Balance at 30 June 2022 Balance at 1 July 2020 Depreciation charge for the year Additions to right-of-use assets Acquisition of right-of-use assets – Tropicana Gold Project Balance at 30 June 2021 Amounts recognised in profit or loss Leases under AASB 16 Interest on lease liabilities Expenses relating to short-term leases $’000 44,453 24 12,264 56,741 Consolidated Plant & Furniture & Buildings & Equipment Equipment Infrastructure Note 22 $’000 41,532 (22,990) 25,911 44,453 24,249 (12,780) 7,481 22,582 41,532 $’000 49 (25) - 24 57 (58) 50 - 49 $’000 19,123 (7,051) 192 12,264 13,728 (5,574) 3,047 7,922 19,123 Consolidated 2022 $’000 1,717 76 $’000 41,532 49 19,123 60,704 Total $’000 60,704 (30,066) 26,103 56,741 38,034 (18,412) 10,578 30,504 60,704 2021 $’000 1,235 44 Lease liability recognised Comprising: Current Non-current Consolidated As at As at 30 June 2022 30 June 2021 $’000 $’000 28,202 26,645 54,847 24,481 35,365 59,846 The majority of the Group’s service contracts that contain leases are structured as variable payments, which are not included in the measurement of lease liabilities under AASB 16. Variable lease payments for the year ended 30 June 2022 totalled $479,479,060 (2021: $348,903,103) and includes non-lease components such as labour. Amounts recognised in statement of cash flows Total cash outflow for leases under AASB 16 Includes non-lease components such as labour. Consolidated 2022 $’000 31,026 2021 $’000 20,397 72 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 73 Notes to the Financial Statements (continued)For the year ended 30 June 2022Notes to the Financial Statements (continued) For the year ended 30 June 202212. 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. Notes to the Financial Statements (continued) For the year ended 30 June 2021 12. Exploration and Evaluation Assets (continued) 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 Consolidated and net assets will be reduced in the period in which the determination is made. Reconciliation of movements during the year Balance at 1 July Expenditure for the period Acquisition of exploration & evaluation assets – Tropicana Acquisition of tenements Impairment Transferred to mine properties under development Transferred to mine properties Balance at 30 June Impairment Note 22 15 13 14 2022 $’000 491,702 53,574 - - (11,117) - (25,055) 509,104 2021 $’000 230,260 46,509 213,300 10,648 (610) (8,405) - 491,702 Exploration and evaluation assets are assessed for impairment if (i) the period for which the right to explore in the area has expired during the period or will expire in the near future, and is not expected to be renewed, (ii) substantive expenditure on further exploration for and evaluation of mineral resources is neither budgeted nor planned, (iii) sufficient data exists to determine technical feasibility and commercial viability and (iv) 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. Total impairment losses recognised in the statement of comprehensive income for the year were as follows: 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 2022 $’000 2,305 2021 $’000 2,686 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. Consolidated 13. Mine Properties under Development Exploration and evaluation assets Carrying value by area of interest Duketon North Operations Duketon South Operations Duketon Gold Project satellite deposits Regional WA exploration NSW exploration Tropicana Gold Project 2022 $’000 11,117 26,874 73,442 15,978 47,282 159,320 186,208 509,104 2021 $’000 610 20,631 54,310 12,539 41,437 148,259 214,526 491,702 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 run of mine ore included in the life of mine plan to which they relate or are written off if the mine property is abandoned. Any proceeds from sales in the pre-production phase are recognised in the statement of comprehensive income. Balance at beginning of period Pre-production expenditure capitalised Transferred from exploration Transferred to inventory Transferred to mine properties Balance at end of period Note 12 14 Consolidated 2022 $’000 18,655 98,673(i) - - (2,330) 114,998 2021 $’000 2,188 8,062(i) 8,405 - - 18,655 (i) Costs associated with Garden Well Underground and the Tropicana Joint Venture Havana Open Pit cutback (2021: Garden Well Underground). 74 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 75 Notes to the Financial Statements (continued)For the year ended 30 June 202214. Mine Properties Accounting Policies Pre-strip costs 14. Mine Properties (continued) 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 run of mine ore included in the life of mine plan on Net carrying amount at 1 July 2021 a units of production basis, where the unit of account is tonnes of ore mined. 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 Additions Transfers from exploration and evaluation Transfers from pre-production 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 Rehabilitation provision adjustment Consolidated Production Pre-strip Capital Stripping Costs $’000 119,874 55,583 Costs $’000 98,359 31,223 Development $’000 46,048 34,080 - - - - - - - - - Other Mine Properties $’000 530,359 28 25,055 2,330 38 Total $’000 794,640 120,914 25,055 2,330 38 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 run of mine ore included in the life of mine plan), on a unit of production basis. The unit of account is tonnes of ore mined. Capital development costs Costs associated with extraction of waste material in order to gain access to the ore at underground mining operations are considered capital development costs. Capital development costs are stated at cost, less accumulated amortisation and accumulated impairment losses. The capital development asset is amortised over the expected recoverable ounces of the mine concerned. The unit of account is ounces recovered. 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 run of mine ore included in the life of mine plan of the mine concerned. The unit of account is tonnes of ore mined. Amortisation expense Net carrying amount at 30 June 2022 (54,411) 121,046 (52,982) 76,600 (36,859) 43,269 (62,607) (206,859) 495,203 736,118 At 30 June 2022 Cost 275,496 264,928 Accumulated amortisation (154,450) (188,328) Net carrying amount 121,046 76,600 Net carrying amount at 1 July 2020 Additions Acquisition – Tropicana Gold Project (Note 22) Transfers from pre-production Rehabilitation provision adjustment Amortisation expense Net carrying amount at 30 June 2021 100,029 (56,760) 43,269 35,757 29,716 674,203 1,314,656 (179,000) (578,538) 495,203 736,118 53,928 - 275,939 127,667 94,726 53,924 91,528 44,027 - - - - - - - - - 509,338 509,338 - (672) - (672) (28,776) 119,874 (37,196) 98,359 (19,425) 46,048 (32,235) (117,632) 530,359 794,640 At 30 June 2021 Cost 219,912 233,705 Accumulated amortisation (100,038) (135,346) Net carrying amount 119,874 98,359 65,949 (19,901) 46,048 646,759 1,166,325 (116,400) (371,685) 530,359 794,640 Key estimates and assumptions Production stripping costs The Group capitalises mining costs incurred during the production stage of its operations in accordance with the accounting policy described above. The identification of specific components will vary between mines as a result of both the geological characteristics and location of the ore body. The financial considerations of the mining operations may also impact the identification and designation of a component. The expected cost per tonne is a function of an individual mine’s design and therefore changes to that design will generally result in changes to the expected cost. Changes in other technical or economic parameters that impact reserves will also have an impact on the expected costs per tonne for each identified component. Changes in the expected cost per tonne are accounted for prospectively from the date of change. 76 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 77 Notes to the Financial Statements (continued)For the year ended 30 June 2022Notes to the Financial Statements (continued) For the year ended 30 June 202215. 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 of disposal 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. Exploration and evaluation assets 17. Provisions Accounting Policies 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 An impairment loss of $11,117,000 (2021: $610,000) has been recognised in relation to tenements that were surrendered, relinquished immediately in the statement of comprehensive income. or expired during the year (refer to Note 12). Key judgements Determination of mineral resources and ore reserves The determination of mineral resources and ore reserves impacts the accounting for asset carrying values. The Group estimates its mineral resources and ore reserves in accordance with the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2012 (the “JORC” Code). The information on mineral resources and ore reserves was prepared by or under the supervision of Competent Persons as defined in the JORC Code. The amounts presented are based on the mineral resources and ore reserves determined under the JORC Code. There are numerous uncertainties inherent in estimating mineral resources and ore reserves, and assumptions that are valid at the time of estimation may change significantly when new information becomes available. Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and may ultimately result in reserves being restated. 16. Trade and Other Payables Accounting Policies Trade payables Trade and other payables are initially recognised at the value of the invoice received from a supplier and subsequently measured at amortised cost. They represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and generally paid within 30 days of recognition. 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(i) (i) Includes stamp duty on Tropicana acquisition. Consolidated 2022 $’000 35,425 55,191 5,634 55,089 2021 $’000 30,833 56,484 4,090 59,941 151,339 151,348 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. Current Dividends payable Long service leave Rehabilitation Non-current Long service leave Rehabilitation Provision for rehabilitation Balance at 1 July Provisions raised during the year Provisions used during the year Provisions re-measured during the year Unwinding of discount Balance at 30 June Consolidated 2022 $’000 623 1,124 3,156 4,903 768 118,919 119,687 107,493 - (1,075) 14,196 1,461 2021 $’000 698 252 5,025 5,975 1,453 102,468 103,921 76,985 30,364 (203) (18) 365 122,075 107,493 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. 78 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 79 Notes to the Financial Statements (continued)For the year ended 30 June 2022Notes to the Financial Statements (continued) For the year ended 30 June 2022Capital structure, financial instruments and risk This section outlines how the Group manages its capital, related financing costs and its exposure to various financial risks. It explains how these risks affect the Group’s financial position and performance and what the Group does to manage these risks. The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to provide returns to shareholders and benefits for other stakeholders and to maintain an efficient capital structure to reduce the cost of capital. The Board’s policy in relation to capital management is to consistently monitor future cash flows against expected expenditures. 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. 18. Net Debt and Finance Costs The carrying amounts of the Group’s current and non-current borrowings approximate their fair value. Current interest-bearing liabilities Lease liabilities Non-current interest-bearing liabilities Lease liabilities Secured bank loan(i) (i) Net of capitalised borrowing costs and interest. Interest-bearing liabilities Finance costs Interest expense Unwinding of discount on provisions Secured Bank Loan Note 11 11 Consolidated 2022 $’000 28,202 28,202 2021 $’000 24,481 24,481 26,645 295,883(i) 322,528 35,365 293,821(i) 329,186 2022 $’000 9,749 1,461 11,210 2021 $’000 1,900 365 2,265 Consolidated Current 18. Net Debt and Finance Costs (continued) Interest-bearing liabilities (continued) Transaction costs Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of borrowings using the effective interest rate method. Fees paid on establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the drawdown occurs and amortised over the period of the remaining facility. Unwinding of discount on provisions The unwinding of discount on provisions represents the cost associated with the passage of time. Rehabilitation provisions are recognised at the discounted value of the present obligation to restore, dismantle and rehabilitate each mine site with the increase in the provision due to the passage of time being recognised as a finance cost in accordance with the policy described in Note 17. 19. Financial Assets Accounting Policy Financial assets are initially recognised at fair value, plus transaction costs that are directly attributable to its acquisition and subsequently measured at amortised costs or fair value depending on the business model for those assets and the contractual cash flow characteristics. Equity Instruments Equity instruments are normally measured at fair value through profit or loss (“FVTPL”) unless the Group chooses, on an instrument-by- instrument basis on initial recognition, to present fair value changes in other comprehensive income (“FVOCI”). This option is irrevocable and only applies to equity instruments which are neither held for trading nor are contingent consideration in a business combination. Gains and losses on equity instruments measured at FVOCI are not recycled through profit and loss or disposal and there is no impairment accounting. All gains and losses are recorded in equity through other comprehensive income. Consolidated 2022 $’000 2021 $’000 Financial assets at amortised cost – term deposit 183 183 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. It is, and has been throughout the year, the Group’s policy that no speculative trading in financial instruments shall be undertaken. In the prior year, the Group entered into a secured Syndicated Facility Agreement with Bank of America for the acquisition of the Tropicana Gold Project. The terms of the facility include: • A Syndicated Debt Facility of $300 million; • First ranking security over the assets of Regis Resources Limited, AFB Resources Pty Ltd, AFB Resources SPV Pty Ltd, Duketon The Group’s holding of these financial instruments exposes it to the following risks: Resources Pty Ltd and LFB Resources NL; • Maturity date of 31 May 2024 being three years from Financial Close.; • Bullet repayment on maturity; • Floating interest rate (range of BBSY + 180bps to 220bps dependent on Net Leverage Ratio); • Interest Cover and Net Leverage Ratio financial covenants; • 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 • Voluntary repayment can be made anytime subject to compliance with the loan agreement. included throughout this financial report. During the current year, the Company worked with Bank of America to syndicate this debt to Macquarie Bank Limited, HSBC, National Australia Bank and Westpac. The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The Audit Committee is responsible for developing and monitoring financial risks and the Risk, Safety, Environment and Community Committee is responsible for developing and monitoring all other risk management policies. The committees report regularly to the Board of Directors on their activities. 80 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 81 Notes to the Financial Statements (continued)For the year ended 30 June 2022Notes to the Financial Statements (continued) For the year ended 30 June 202220. Financial Risk Management (continued) 20. Financial Risk Management (continued) Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and Market Risk 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 Risk, Safety, Environment and Community 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 Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and commodity 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’s revenue is derived from the sale of gold in Australian dollars and costs are mainly incurred in Australian dollars. However, because gold is globally traded in US dollars, the Group is exposed to foreign currency risk. The Group hedges its gold ounces in Australian dollars, which provides for some coverage of 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 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 foreign currency risk at reporting date. risk arises from cash and cash equivalents and gold bullion awaiting settlement. The Group has adopted the policy of dealing with • Interest rate risk: The Group is exposed to interest rate risk through its borrowings and cash deposits, which attract variable interest creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. Cash holdings are with Commonwealth rates. The Group regularly reviews its current working capital requirements against cash balances and the returns available on short 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 term deposits. 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 risking damage to the Group’s reputation. The Group uses 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 and meeting debt covenant compliance which excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters and pandemics. 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. 30 June 2022 ($’000) Carrying Contractual 6 mths or More than amount cash-flows less 6-12 mths 1-2 years 2-5 years 5 years Trade and other payables 145,705 (145,705) (145,705) - - - - Lease liabilities Secured bank loan Total 30 June 2021 ($’000) 54,847 (57,428) (17,010) (12,336) (9,036) (17,829) (1,217) 295,883 (318,308) (4,577) (4,577) (309,154) - - 496,436 (521,442) (167,293) (16,913) (318,190) (17,829) (1,217) Carrying Contractual 6 mths or More than amount cash-flows less 6-12 mths 1-2 years 2-5 years 5 years Trade and other payables 147,258 (147,258) (147,258) - - - - • 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). 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. 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 Lease liabilities Variable rate instruments Cash and cash equivalents Secured bank loan Consolidated 2022 $’000 183 (54,847) (54,664) 2021 $’000 183 (59,846) (59,663) 207,354 242,627 (295,883) (293,821) (88,529) (51,194) 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. 59,846 (63,264) (14,649) (11,271) (15,155) (16,183) (6,006) Cash flow sensitivity analysis for variable rate instruments 293,821 (317,114) (2,852) (2,852) (5,705) (305,705) - 500,925 (527,636) (164,759) (14,123) (20,860) (321,888) (6,006) A change of 200 basis points (2021: 100 basis points) in interest rates at the reporting date would have increased/(decreased) profit or loss before tax by the amount shown below. The analysis assumes that all other variables remain constant. Lease liabilities Secured bank loan Total Assets pledged as security Members of the Regis Group (being Regis Resources Limited, AFB Resources Pty Ltd, AFB Resources SPV Pty Ltd, Duketon Resources Pty Ltd and LFB Resources NL) have granted an all-asset security including guarantees in respect of amounts outstanding under the Syndicated Facility Agreement and in respect of the Company’s hedging obligations with Macquarie Bank Limited. The Group is also required to comply with covenants under the Common Terms Deed with Macquarie Bank Limited. The lease liabilities are secured by the related assets. Financial guarantee liabilities As at 30 June 2022, the Group did not have any financial guarantee liabilities (2021: Nil). Interest Expense Increase 2.0% (2021: 1.0%) Decrease 2.0% (2021: 1.0%) Consolidated 2022 $’000 (6,000) 6,000 2021 $’000 (252) 252 A sensitivity analysis has not been disclosed in relation to the variable interest rate cash on deposit as the result has been determined to be immaterial to the statement of comprehensive income for both the current and prior financial years. 82 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 83 Notes to the Financial Statements (continued)For the year ended 30 June 2022Notes to the Financial Statements (continued) For the year ended 30 June 202220. Financial Risk Management (continued) 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 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. • Level 3: the fair value is estimated using inputs for the asset or liability that are not based on observable market data. The Group does not have any financial assets or liabilities in this category. For financial instruments that are carried at fair value on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. There were no transfers between levels during the year. 21. Issued Capital and Reserves Accounting Policy 21. Issued Capital and Reserves (continued) Accounting Policy (continued) Balance at 1 July 2020 Net gain on financial instruments recognised in equity Tax effect of transfers and revaluations Share-based payment transactions Balance at 30 June 2021 and 1 July 2021 Net gain on financial instruments recognised in equity Tax effect of transfers and revaluations Share-based payment expense Balance at 30 June 2022 Nature and purpose of reserves Share-based payment reserve Share-based Financial Total payment reserve assets reserve Reserves $’000 29,506 - - 3,934 33,440 - - 804 34,244 $’000 1,717 - - - 1,717 - - - 1,717 $’000 31,223 - - 3,934 35,157 - - 804 35,961 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. Ordinary shares are classified as equity. Transaction costs directly attributable to the issue of shares or options are recognised as a Financial assets reserve deduction from equity, net of any related income tax effects. The financial assets reserve records fair value changes on financial assets designated at fair-value through other comprehensive Ordinary shares – issued and fully paid Movement in ordinary shares on issue At 1 July 2020 Issued on exercise of options and performance rights Dividend reinvestment Issued on acquisition (Stone Resources Australia Limited) Issued on acquisition (Tropicana 30% interest) Transaction costs At 30 June 2021 Issued on exercise of options and performance rights Dividend reinvestment Transaction costs At 30 June 2022 Consolidated 2022 $’000 2021 $’000 1,096,575 1,095,533 No. shares (‘000s) $’000 508,180 435,145 836 2,552 1,823 - 10,206 9,750 240,750 650,026 - (9,594) 754,141 1,095,533 191 508 - - 1,046 (4) 754,840 1,096,575 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. income. Other Disclosures This section provides information on items which require disclosure to comply with Australian Accounting Standards and other regulatory pronouncements. 22. Tropicana Gold Project Asset Acquisition During the prior year, Regis acquired a 30% non-operator interest in the Tropicana Gold Project located in the Albany-Fraser Belt, approximately 330 kilometres north-east of Kalgoorlie in Western Australia. Tropicana is operated by joint venture partner AngloGold Ashanti Australia Limited and contains the Tropicana, Havana and Boston Shaker open pits and the Boston Shaker and Tropicana underground operations. The Tropicana acquisition had an acquisition date for accounting purposes of 30 April 2021. The Tropicana Joint Venture (JV) in Western Australia was formed in 2002 between AngloGold Ashanti Australia Ltd (70% and manager) and Independence Group NL - IGO (30%) and as of 31 May 2021, Regis Resources Ltd acquired the IGO 30% stake. Cash Paid to IGO Purchase cost (including transaction costs) at 30 April 2021 Less: Regis transaction costs May 2021 net revenue adjustments Cash acquired on acquisition Payment for acquisition of assets (net of cash acquired) at 31 May 2021 $’000 947,509 (46,994) (11,936) (3,578) 885,001 The group has determined that the transaction does not constitute a business combination in accordance with AASB 3 Business Combinations. The acquisition of the net assets has therefore been accounted for as an asset acquisition. When an asset acquisition does not constitute a business combination, the assets and liabilities are allocated a carrying amount based on their relative fair values in an asset purchase transaction. 84 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 85 Notes to the Financial Statements (continued)For the year ended 30 June 2022Notes to the Financial Statements (continued) For the year ended 30 June 2022 22. Tropicana Gold Project Asset Acquisition (continued) 23. Deferred Income Tax (continued) The value of the assets acquired and liabilities assumed has been allocated on a Fair Value basis. Details of the purchase consideration Deferred income tax at 30 June relates to the following: and the net assets acquired are as follows: Net Assets Acquired Cash and cash equivalents Trade and Other Receivables Inventory Property Plant and Equipment Right-of-use Asset Exploration & Evaluation Asset Mine Properties Total Assets Trade and Other Payables Lease Liability Rehabilitation Liabilities Total Liabilities Total Purchase Consideration 23. Deferred Income Tax Accounting Policy Note 10 11 12 14 11 17 $’000 3,578 2,332 157,346 110,200 30,504 213,300 509,338 1,026,598 (18,221) (30,504) (30,364) (79,089) 947,509 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 2022 there are no unrecognised temporary differences associated with the Group’s investment in subsidiaries (2021: $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 tax liabilities Receivables Inventories Borrowing costs 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 Deferred tax assets Trade and other payables Provisions Expenses deductible over time Share issue costs Tax losses carried forward Gross deferred tax assets Set off of deferred tax assets Net deferred tax assets Reconciliation of deferred tax, net: Opening balance at 1 July – net deferred tax assets/(liabilities) Income tax (expense)/ benefit recognised in profit or loss Income tax (expense)/benefit recognised in equity Closing balance at 30 June – net deferred tax (liabilities)/ assets Consolidated 2022 $’000 433 5,495 597 78 23,977 67,077 17,040 113,512 228,209 (102,895) 125,314 6,937 37,179 284 2,423 56,072 102,895 (102,895) - 2021 $’000 691 (2,022) (119) 159 15,027 53,800 4,337 88,103 159,976 (46,352) 113,624 6,107 32,602 168 3,231 4,244 46,352 (46,352) - (113,624) (117,408) (10,882) (808) (255) 4,038 (125,314) (113,624) 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. 86 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 87 Notes to the Financial Statements (continued)For the year ended 30 June 2022Notes to the Financial Statements (continued) For the year ended 30 June 202223. Deferred Income Tax (continued) Tax Consolidation 24. Share-based Payments (continued) Summary of options granted The Company and its wholly-owned Australian resident entities became part of a tax-consolidated group on 14 December 2006. As a The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of, and movements in, share options consequence, all members of the tax-consolidation group are taxed as a single entity from that date. The head entity within the tax- issued during the year: 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. Outstanding at the beginning of the year Granted during the year Forfeited during the year Exercised during the year Expired during the year Outstanding at the end of the year Exercisable at the end of the year 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 Weighted average share price at the date of exercise entity default on its tax payment obligations. No amounts have been recognised in the financial statements in respect of this agreement Weighted average remaining contractual life 2022 No. WAEP - - - - - - - - - - - - - - 2021 No. 545,000 - - (545,000) - - - 2022 n/a n/a n/a n/a WAEP $3.6923 - $3.9000 $3.4185 $1.4000 $3.9000 - 2021 $5.41 n/a $3.90 n/a as payment of any amounts under the tax sharing agreement is considered remote. 24. Share-based Payments Accounting Policy The value of options or performance rights 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 or performance rights (the vesting period), ending on the date on which the relevant employees become fully entitled to the option or performance right (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 or performance right; • The current best estimate of the number of options or performance rights 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. Recognised share-based payments expense Employee options share-based payments expense Performance rights expense Total expense arising from share-based payment transactions Consolidated 2022 $’000 - 804 804 2021 $’000 3 3,931 3,934 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. Range of exercise prices Weighted average fair value of options granted during the year 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 years ended 30 June 2022 and 30 June 2021. Performance Rights FY20 Performance Rights In November 2019, 764,794 performance rights were granted to the Executive Director Mr Jim Beyer, CFO Mr Jon Latto and other executives, under the Group’s Executive Incentive Plan (“EIP”). The performance conditions that the Board has determined will apply to 129,433 and 58,343 LTI Performance Rights granted to Mr Jim Beyer and Mr Jon Latto respectively. Mr Jon Latto resigned as CFO on 11 May 2022 and 58,343 performance rights lapsed upon the date of the resignation in accordance with the terms and conditions. In accordance with AASB 2, expenses recognised for Mr Jon Latto were reversed in FY22. The table below details the terms and conditions of the grant and the assumptions used in estimating fair value: 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 12 comparator mining companies Tranche B Tranche C 20% of the Performance Rights The Company’s absolute TSR measured against specific thresholds 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 The vesting of all options is subject to service conditions being met whereby the recipient must meet the eligible employee criteria as Tranche F 15% of the Performance Rights Annual production growth above levels contained in the Life of Mine defined in the Option Plan. Plan. Growth in production can arise from M&A activity. 88 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 89 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. 30,890 STI Performance Rights were granted to Mr Jim Beyer in FY20 with the balance of the 2019 Performance Rights (being 546,128 Performance Rights) granted to senior executives vesting progressively over a four-year period from 1 July 2019 to 30 June 2023 (Tranche G). Notes to the Financial Statements (continued)For the year ended 30 June 2022Notes to the Financial Statements (continued) For the year ended 30 June 202224. Share-based Payments (continued) Performance Rights (continued) 24. Share-based Payments (continued) Performance Rights (continued) The following table details the terms and conditions of the grant and the assumptions used in estimating fair value: In September 2020, 592,447 Performance Rights were granted to employees in the form of short-term incentives (STI’s) under the Tranche A & B Tranche C & D Tranche E & F Tranche G STI LTI Group’s EIP. The performance conditions that the Board has determined will apply to the Performance Rights are summarised below: Tranche Weighting Performance Conditions 26 November 2019 26 November 2019 26 November 2019 26 November 2019 26 November 2019 Tranche H 100% of the Performance Rights Employee being employees of the company as at 11 December 2020 Item Grant date Value of the underlying security at grant date Exercise price Dividend yield Risk free rate Volatility Performance period (years) Commencement of measurement period $4.62 nil 4.00% 0.73% 35% $4.62 nil 4.00% 0.73% 35% $4.62 nil 4.00% 0.73% 35% $4.62 nil 4.00% 0.77% 35% $4.62 nil 4.00% 0.77% 35% 3 3 3 0.6 4 1 July 2019 1 July 2019 1 July 2019 1 July 2019 1 July 2019 Test date 30 June 2022 30 June 2022 30 June 2022 1 July 2020 30 June 2023 Remaining performance period (years) Nil Nil Nil Nil 1 The fair value of the Performance Rights granted during FY20 was $3,178,560 and the weighted average fair value was $4.16 (Tranche A-F: $574,477, $3.06, and Tranche G: $2,604,083, $4.51). FY21 Performance Rights In November 2020, a total of 277,364 Performance Rights were granted to the Chief Executive Officer and Managing Director, Mr Jim Beyer (154,353), and to executives Mr Stuart Gula (67,350) and Mr Jon Latto (55,661), in the form of long-term incentives (LTI’s) under the Group’s EIP. The fair value at grant date of Tranche H, which has non-market based performance conditions, was estimated using a Black Scholes option pricing model. The table below details the terms and conditions of the grant and the assumptions used in estimating fair value: Item Grant date Value of the underlying security at grant date Exercise price Dividend yield Risk free rate Volatility Performance period (years) Commencement of measurement period Tranche A Tranche D Tranche E Tranche G Tranche H 25 November 2020 25 November 2020 25 November 2020 25 November 2020 14 September 2020 $3.75 Nil 3.50% 0.11% 45% 3 $3.75 Nil 3.50% 0.11% 45% 3 $3.75 Nil 3.50% 0.11% 45% 3 $3.75 Nil 3.50% 0.09% 45% 0.6 $5.34 Nil 3.50% 0.22% 45% 0.2 1 July 2020 1 July 2020 1 July 2020 25 November 2020 14 September 2020 Test date 30 June 2023 30 June 2023 30 June 2023 1 July 2021 11 December 2020 Remaining performance period (years) 1 1 1 Nil Nil Mr Jon Latto resigned as CFO on 11 May 2022 and 55,661 performance rights lapsed upon the date of the resignation in accordance The fair value of the Performance Rights granted during FY21 was $4,117,748 and the weighted average fair value was $4.39 (Tranche with the terms and conditions. In accordance with AASB 2, expenses recognised for Mr Jon Latto were reversed in FY22. A,D and E: $731,827, $2.64, Tranche G: $248,322, $3.67 and Tranche H: $3,137,599, $5.30). The performance conditions that the Board has determined will apply to the Performance Rights are summarised below: FY22 Performance Rights Tranche Weighting Performance Conditions Tranche A 50% of the Performance Rights The Company’s relative total shareholder return (RTSR) measured against the RTSRs of 12 comparator mining companies Tranche D Tranche E 25% of the Performance Rights The Company’s life of mine reserves growth in excess of depletion 25% of the Performance Rights McPhillamys Project targets as determined by the Board The fair value at grant date of Tranche A, which has market-based performance conditions, was estimated using a Monte Carlo In November 2021, a total of 796,467 Performance Rights were granted to the Chief Executive Officer and Managing Director, Mr Jim Beyer (450,563), and to executives Mr Stuart Gula (189,709) and Mr Jon Latto (156,195) in the form of long-term incentives (LTI’s) under the Group’s EIP. Mr Jon Latto resigned as CFO on 11 May 2022 and 156,195 performance rights lapsed upon the date of the resignation in accordance with the terms and conditions. In accordance with AASB 2, expenses recognised for Mr Jon Latto were reversed in FY22. The performance conditions that the Board has determined will apply to the Performance Rights are summarised below: simulation, and a Black Scholes option pricing model was used to estimate the fair value at grant date of Tranches D and E, which have Tranche Weighting Performance Conditions non-market-based performance conditions. In November 2020, a total of 67,589 Performance Rights were granted to the Chief Executive Officer and Managing Director, Mr Jim Beyer (37,816), and to executives Mr Stuart Gula (11,565) and Mr Jon Latto (18,208) in the form of short-term incentives (STI’s) under the Group’s EIP. Mr Jon Latto resigned as CFO on 11 May 2022 and 18,208 performance rights lapsed upon the date of the resignation in accordance with the terms and conditions. In accordance with AASB 2, expenses recognised for Mr Jon Latto were reversed in FY22. The performance conditions that the Board has determined will apply to the Performance Rights are summarised below: Tranche Weighting Performance Conditions Tranche G 100% of the Performance Rights Mr Jim Beyer, Mr Jon Latto and Mr Stuart Gula being an employee of the company as at 1 July 2021 Tranche A 50% of the Performance Rights The Company’s relative total shareholder return (RTSR) measured against the RTSRs of 12 comparator mining companies Tranche D Tranche F 25% of the Performance Rights The Company’s life of mine reserves growth in excess of depletion 25% of the Performance Rights Annual production growth above levels contained in the Life of Mine Plan. Growth in production can arise from M&A activity. The fair value at grant date of Tranche A, which has market-based performance conditions, 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 D and F, which have non-market based performance conditions. In November 2021, a total of 180,433 Performance Rights were granted to the Chief Executive Officer and Managing Director, Mr Jim Beyer (89,917), and to executives Mr Stuart Gula (47,758) and Mr Jon Latto (42,758) in the form of short-term incentives (STI’s) under the Group’s EIP. The fair value at grant date of Tranche G, which has non-market based performance conditions, was estimated using a Black Scholes Mr Jon Latto resigned as CFO on 11 May 2022 and 42,758 performance rights lapsed upon the date of the resignation in accordance option pricing model. with the terms and conditions. In accordance with AASB 2, expenses recognised for Mr Jon Latto were reversed in FY22. 90 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 91 Notes to the Financial Statements (continued)For the year ended 30 June 2022Notes to the Financial Statements (continued) For the year ended 30 June 202224. Share-based Payments (continued) Performance Rights (continued) 25. Related Parties Key management personnel compensation The performance conditions that the Board has determined will apply to the Performance Rights are summarised below: The key management personnel compensation included in employee benefits expense (Note 3) and share-based payments (Note 24), is Tranche Weighting Performance Conditions Tranche G 100% of the Performance Rights Mr Jim Beyer, Mr Jon Latto and Mr Stuart Gula being an employee of the company as at 1 July 2022 The fair value at grant date of Tranche G, which has non-market based performance conditions, was estimated using a Black Scholes option pricing model. 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 Tranche D Tranche F Tranche G 25 November 2021 25 November 2021 25 November 2021 25 November 2021 $1.930 Nil 3.25% 1.03% 45% 3 $1.930 Nil 3.25% 1.03% 45% 3 $1.930 Nil 3.25% 1.03% 45% 3 $1.930 Nil 3.25% 0.55% 45% 0.6 Commencement of measurement period 1 July 2021 1 July 2021 1 July 2021 25 November 2021 Test date 30 June 2024 30 June 2024 30 June 2024 1 July 2022 Remaining performance period (years) 2 2 2 Nil The fair value of the Performance Rights granted during the year was $1,417,191 and the weighted average fair value was $1.45 (Tranche A, D and F: $1,075,631, $1.35, Tranche G: $341,560, $1.89). Summary of Performance Rights Outstanding at the beginning of the year Granted during the year Forfeited during the year Issued during the year Vested and unissued during the year Outstanding at the end of the year Weighted average share price at the date of issue Weighted average remaining contractual life Weighted average fair value of Performance Rights granted during the year 2022 891,837 976,900 (591,469) (131,004) (48,537) 1,097,727 $1.95 1 year $1.45 2021 925,560 937,401 (226,195) (685,052) (59,877) 891,837 $3.59 2 years $4.39 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. as follows: Short-term employee benefits Post-employment benefits Long-term benefits Termination benefits Share-based payment Total compensation Consolidated 2022 $’000 2021 $’000 2,677,117 2,558,379 222,370 171,053 51,353 749,691 214,890 136,075 - 721,634 3,871,584 3,630,977 Individual directors’ and executives’ compensation disclosures Information regarding individual directors’ and executives’ compensation and equity instrument disclosures required by s300A of the Corporations Act and Corporations Regulations 2M.3.03 are provided in the Remuneration Report section of the Directors’ Report. No director has entered into a material contract with the Group either in the current or prior financial year and there were no material contracts involving directors’ interests existing at year end, other than advised elsewhere in this report. Subsidiaries The consolidated financial statements include the financial statements of Regis Resources Limited and the subsidiaries listed in the following table: Name Duketon Resources Pty Ltd Artane Minerals NL Rosemont Gold Mines Pty Ltd LFB Resources NL AFB Resources SPV Pty Ltd AFB Resources Pty Ltd Ultimate Parent Country of Incorporation Australia Australia Australia Australia Australia Australia % Equity Interest Investment $’000 2022 100% 100% 100% 100% 100% 100% 2021 100% 100% 100% 100% 100% 100% 2022 30,575 - - 2021 30,575 - - 73,941 73,941 - - - - 104,516 104,516 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 Pty Ltd 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 Pty Ltd has no fixed date of repayment and is non-interest-bearing. As at 30 June 2022, the balance of the loan receivable was $42,381,000 (2021: $39,892,000). A loan is made by the Company to LFB Resources NL and represents the subsidiary’s share of payments for exploration and evaluation expenditure. The loan outstanding between the Company and LFB Resources NL has no fixed date of repayment and is non-interest- bearing. As at 30 June 2022, the balance of the loan receivable was $125,888,000 (2021: $112,134,000). In the prior year, a loan was made by the Company to AFB Resources Pty Ltd and represents the Company’s share in the Tropicana Gold Project. The loan outstanding between the Company and AFB Resources Pty Ltd has no fixed date of repayment and is non-interest- bearing. As at 30 June 2022, the balance of the loan receivable was $613,811,000 (2021: $615,541,000). Transactions with key management personnel For the year ended 30 June 2022, services totalling $78,043 (2021: $529,793) have been provided on normal commercial terms to the Group by Mintrex Pty Ltd (“Mintrex”). Mrs Morgan was Managing Director and Chief Executive Officer of Mintrex until 30 September 2021 and was a member of the Board of Mintrex until 30 June 2022. She remains a shareholder. The balance outstanding at 30 June 2022 was $1,154 excluding GST (2021: $22,530). 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. 92 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 93 Notes to the Financial Statements (continued)For the year ended 30 June 2022Notes to the Financial Statements (continued) For the year ended 30 June 202226. Parent Entity Information 29. Auditor’s Remuneration The following details information related to the parent entity, Regis Resources Limited, at 30 June 2022. The information presented here has been prepared using consistent accounting policies as detailed in the relevant notes of this report. Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Issued capital Reserves Retained profits Total equity Net profit/(loss) for the year Other comprehensive income for the period Total comprehensive income for the period Consolidated 2022 $’000 222,759 1,637,997 1,860,756 153,631 118,284 271,915 2021 $’000 353,503 1,538,100 1,891,603 106,041 169,586 275,627 1,096,575 1,095,533 35,961 456,305 35,157 485,286 1,588,841 1,615,976 (5,967) 144,363 - - (5,967) 144,363 Members of the Regis Group (being Regis Resources Limited, AFB Resources Pty Ltd, AFB Resources SPV Pty Ltd, Duketon Resources Pty Ltd and LFB Resources NL) have granted an all-asset security including guarantees in respect of amounts outstanding under the Syndicated Facility Agreement and in respect of the Company’s hedging obligations with Macquarie Bank Limited. Total exploration expenditure commitments (Note 12) are $2,305,000 of which $630,000 is incurred by the parent entity. 27. Commitments The Group has exploration expenditure commitments as disclosed in Note 12. During the current year, the Group entered into a contract to purchase a property in New South Wales for $22,500,000 for the purposes of the McPhillamys Project. The purchase was settled in July 2022. 28. Contingencies As at 30 June 2022, the Group did not have any material contingent assets or liabilities (30 June 2021: nil). Consolidated 2022 $ 2021 $ Audit services KPMG Australia Audit and review of financial statements 393,300 377,020 Assurance services Regulatory assurance services Other assurance services Other services Other advisory services Taxation compliance services Total KPMG remuneration Other auditors Other audit services 30. Subsequent Events Share Issue 5,175 - 36,225 - 4,658 20,700 37,778 - 434,700 440,156 39,050 50,770 Subsequent to year end, 137,675 shares have been issued as a result of the vesting of performance rights. Payment of Stamp Duty In July 2022, stamp duty of $38,970,000 was paid in relation to the prior year acquisition of Tropicana. At 30 June 2022, this amount is included in trade and other payables as disclosed in Note 16. Dividends On 24 August 2022, the Directors proposed a final year dividend on ordinary shares in respect of the 2022 financial year. Refer to Note 6. Settlement of Property Purchase The purchase of a property in New South Wales was settled in July 2022. Refer to Note 27 for further details. 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. 94 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 95 Notes to the Financial Statements (continued)For the year ended 30 June 2022Notes to the Financial Statements (continued) For the year ended 30 June 2022Directors’ Declaration 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 Group are in accordance with the Corporations Act 2001, including: (i) Giving a true and fair view of the Group’s financial position as at 30 June 2022 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 and Group 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 2022. 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, 24 August 2022 31. New Accounting Standards and Interpretations New standards adopted The Group has early adopted the Amendments to AASB 116 Property, Plant and Equipment: Proceeds before Intended Use from 1 July 2021. Under the amendments, the Group recognises the proceeds from gold sales from mines which are in the pre-production phase in the statement of comprehensive income, together with the costs of production. Prior to this adoption any proceeds from sales in the pre-production phase were deducted from the cost of the mine properties under development asset. These amendments apply retrospectively and did not have a material impact on the comparative periods presented, and therefore comparative information has not been restated. 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 2022 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 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 AASB 2020-3 Amendments to Australia Accounting Standards – Annual Improvements 2018-2020 and Other Amendments The subject of the principal amendments to the Standards are set out below: AASB 1 First-time Adoption of Australian Accounting Standards The amendment allows a subsidiary that becomes a first-time adopter after its parent to elect to measure cumulative translation differences for all foreign operations at the carrying amount that would be included in the parent’s consolidated financial, based on the parents date of transition, if no adjustment were made for consolidation procedures and for the effects of the business combination in which the parent acquired the subsidiary. AASB 9 Financial Instruments The amendment clarifies that an entity includes only fees paid or received between the borrower and the lender and fees paid or received by either the borrower or the lender on the other’s behalf when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. AASB 137 Provisions, Contingent Liabilities and Contingent Assets The amendment specifies the costs an entity includes when assessing whether a contract will be loss-making consists of the incremental costs of fulfilling that contract and an allocation of other costs that relate directly to fulfilling contracts. Application date of Standard: 1 January 2022 Application date for Group: 1 July 2022 AASB2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current The amendments require a liability be classified as current when companies do not have a substantive right to defer settlement at the end of the reporting period. AASB 2020-6 defers the mandatory effective date of amendments that were originally made in AASB 2020-1 so the amendments are required to be applied for annual reporting periods beginning on or after 1 January 2023 instead of 1 January 2022. Application date of Standard: 1 January 2023 Application date for Group: 1 July 2023 AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition of Accounting Estimates The amendments provide a definition of and clarifications on accounting estimates and clarify the concept of materiality in the context of disclosure of accounting policies. Application date of Standard: 1 January 2023 Application date for Group: 1 July 2023 96 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 97 Notes to the Financial Statements (continued)For the year ended 30 June 2022Independent Auditor’s Report Independent Auditor’s Report (continued) 98 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 99 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. 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 (the Company). In our opinion, the accompanying Financial Report of the Company 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 2022 and of its financial performance for the year ended on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises the: • Consolidated Balance Sheet as at 30 June 2022. • Consolidated statement of comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended. • Notes including a summary of significant accounting policies. • Directors’ Declaration. The Group consists of 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 (including Independence Standards) (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 ore stockpiles. • Valuation of exploration and evaluation assets. • Valuation of Property, plant and equipment; Mine properties under development; and Mine properties. 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 global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. 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 (the Company). In our opinion, the accompanying Financial Report of the Company 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 2022 and of its financial performance for the year ended on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises the: • Consolidated Balance Sheet as at 30 June 2022. • Consolidated statement of comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended. • Notes including a summary of significant accounting policies. • Directors’ Declaration. The Group consists of 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 (including Independence Standards) (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 ore stockpiles. • Valuation of exploration and evaluation assets. • Valuation of Property, plant and equipment; Mine properties under development; and Mine properties. 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 global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. 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 (the Company). In our opinion, the accompanying Financial Report of the Company 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 2022 and of its financial performance for the year ended on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises the: • Consolidated Balance Sheet as at 30 June 2022. • Consolidated statement of comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended. • Notes including a summary of significant accounting policies. • Directors’ Declaration. The Group consists of 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 (including Independence Standards) (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 ore stockpiles. • Valuation of exploration and evaluation assets. • Valuation of Property, plant and equipment; Mine properties under development; and Mine properties. 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. Valuation and classification of ore stockpiles A$295,749,000 Refer to Note 9 to the Financial Report The key audit matter How the matter was addressed in our audit Significant judgement is required to be exercised by the Group in assessing the value and classification of ore stockpiles which will be used to produce gold bullion in the future. The valuation and classification of ore stockpiles is a key audit matter because: • Additional ore stockpiles have been recorded through the continuation of mining activities; and • Significant judgement is required by us in evaluating and challenging the key assumptions within the Group’s assessment of net realisable value and estimated timing of processing into gold bullion. The Group’s assessment is based on a model which estimates future revenue expected to be derived from gold contained in the ore stockpiles, less future processing costs, to convert stockpiles into gold bullion. We placed particular focus on those assumptions listed below which impact the valuation and classification of ore stockpiles: • Future processing costs of ore stockpiles including potential cost increases. • The estimated quantity of gold contained within the ore stockpiles. • Future gold prices expected to prevail when the gold from existing ore stockpiles is processed and sold. • Estimated timing of conversion of ore stockpiles into gold bullion, which drives the classification of ore stockpiles as current or non-current assets. Assumptions are forward looking or not based on observable data and are therefore inherently judgmental to audit. Our procedures included: • Testing the Group’s 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 applied by the Group in determining the value of ore stockpiles against the requirements of the accounting standards. • Assessing the key assumptions in the Group’s model used to determine the value of ore stockpiles by: o Comparing future processing costs to previous actual costs, and for consistency with the Group’s latest life of mine plan. o Comparing the estimated quantity of gold contained within stockpiles to the Group’s internal geological survey results and historical trends. We assessed the scope, competence and objectivity of the Group’s internal expert involved in preparing the geological survey results. o Comparing gold prices to published external analysts’ data for prices expected to prevail in the future. • Critically evaluating the Group’s classification of ore stockpiles as current or 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. Valuation and classification of ore stockpiles A$295,749,000 Refer to Note 9 to the Financial Report The key audit matter How the matter was addressed in our audit Significant judgement is required to be exercised by the Group in assessing the value and classification of ore stockpiles which will be used to produce gold bullion in the future. The valuation and classification of ore stockpiles is a key audit matter because: • Additional ore stockpiles have been recorded through the continuation of mining activities; and • Significant judgement is required by us in evaluating and challenging the key assumptions within the Group’s assessment of net realisable value and estimated timing of processing into gold bullion. The Group’s assessment is based on a model which estimates future revenue expected to be derived from gold contained in the ore stockpiles, less future processing costs, to convert stockpiles into gold bullion. We placed particular focus on those assumptions listed below which impact the valuation and classification of ore stockpiles: • Future processing costs of ore stockpiles including potential cost increases. • The estimated quantity of gold contained within the ore stockpiles. • Future gold prices expected to prevail when the gold from existing ore stockpiles is processed and sold. • Estimated timing of conversion of ore stockpiles into gold bullion, which drives the classification of ore stockpiles as current or non-current assets. Assumptions are forward looking or not based on observable data and are therefore inherently judgmental to audit. Our procedures included: • Testing the Group’s 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 applied by the Group in determining the value of ore stockpiles against the requirements of the accounting standards. • Assessing the key assumptions in the Group’s model used to determine the value of ore stockpiles by: o Comparing future processing costs to previous actual costs, and for consistency with the Group’s latest life of mine plan. o Comparing the estimated quantity of gold contained within stockpiles to the Group’s internal geological survey results and historical trends. We assessed the scope, competence and objectivity of the Group’s internal expert involved in preparing the geological survey results. o Comparing gold prices to published external analysts’ data for prices expected to prevail in the future. • Critically evaluating the Group’s classification of ore stockpiles as current or 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. KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. 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 (the Company). In our opinion, the accompanying Financial Report of the Company 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 2022 and of its financial performance for the year ended on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises the: • Consolidated Balance Sheet as at 30 June 2022. • Consolidated statement of comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended. • Notes including a summary of significant accounting policies. • Directors’ Declaration. The Group consists of 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 (including Independence Standards) (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 ore stockpiles. • Valuation of exploration and evaluation assets. • Valuation of Property, plant and equipment; Mine properties under development; and Mine properties. 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 global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. 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 (the Company). In our opinion, the accompanying Financial Report of the Company 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 2022 and of its financial performance for the year ended on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises the: • Consolidated Balance Sheet as at 30 June 2022. • Consolidated statement of comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended. • Notes including a summary of significant accounting policies. • Directors’ Declaration. The Group consists of 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 (including Independence Standards) (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 ore stockpiles. • Valuation of exploration and evaluation assets. • Valuation of Property, plant and equipment; Mine properties under development; and Mine properties. 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 global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. 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 (the Company). In our opinion, the accompanying Financial Report of the Company 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 2022 and of its financial performance for the year ended on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises the: • Consolidated Balance Sheet as at 30 June 2022. • Consolidated statement of comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended. • Notes including a summary of significant accounting policies. • Directors’ Declaration. The Group consists of 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 (including Independence Standards) (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 ore stockpiles. • Valuation of exploration and evaluation assets. • Valuation of Property, plant and equipment; Mine properties under development; and Mine properties. 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. Independent Auditor’s Report (continued) Independent Auditor’s Report (continued) 100 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 101 Valuation of exploration and evaluation assets A$509,104,000 Refer to Note 12 to the Financial Report The key audit matter How the matter was addressed in our audit The valuation of exploration and evaluation assets (E&E) is a key audit matter due to: • The significance of the E&E balance (being approximately 22% of the Group’s total assets); and • The greater level of audit effort to evaluate the Group’s application of the requirements of the industry specific accounting standard AASB 6 Exploration for and Evaluation of Mineral Resources, in particular the presence of impairment indicators. The presence of impairment indicators would necessitate a detailed analysis by the Group of the value of E&E, therefore given the criticality of this to the scope and depth of our work, we involved senior team members to challenge the Group’s determination that no such indicators existed. In assessing the presence of impairment indicators, we focused on those that may draw into question the commercial continuation of E&E activities. 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 areas of interest; and • 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. Our procedures included: • We evaluated the Group’s accounting policy to recognise exploration and evaluation assets using the criteria in the accounting standard. • We tested the Group’s current right of tenure and compliance with minimum expenditure requirements for a sample of exploration licences by checking the ownership of the relevant license and expenditure recorded to government registries. • 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 evaluated Group documents, such as minutes of board meetings, internal management plans and reports lodged with relevant government authorities for consistency with the Group’s stated intentions for continuing exploration and evaluation activities in certain areas, the potential for commercially viable quantities of reserves to exist and information regarding the results of activities. We assessed this through interviews with key operational and finance personnel and announcements made by the Group to the ASX. • We looked for any inconsistency regarding the existence of reserves to the treatment of E&E and the requirements of the accounting standard. Valuation of exploration and evaluation assets A$509,104,000 Refer to Note 12 to the Financial Report The key audit matter How the matter was addressed in our audit The valuation of exploration and evaluation assets (E&E) is a key audit matter due to: • The significance of the E&E balance (being approximately 22% of the Group’s total assets); and • The greater level of audit effort to evaluate the Group’s application of the requirements of the industry specific accounting standard AASB 6 Exploration for and Evaluation of Mineral Resources, in particular the presence of impairment indicators. The presence of impairment indicators would necessitate a detailed analysis by the Group of the value of E&E, therefore given the criticality of this to the scope and depth of our work, we involved senior team members to challenge the Group’s determination that no such indicators existed. In assessing the presence of impairment indicators, we focused on those that may draw into question the commercial continuation of E&E activities. 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 areas of interest; and • 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. Our procedures included: • We evaluated the Group’s accounting policy to recognise exploration and evaluation assets using the criteria in the accounting standard. • We tested the Group’s current right of tenure and compliance with minimum expenditure requirements for a sample of exploration licences by checking the ownership of the relevant license and expenditure recorded to government registries. • 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 evaluated Group documents, such as minutes of board meetings, internal management plans and reports lodged with relevant government authorities for consistency with the Group’s stated intentions for continuing exploration and evaluation activities in certain areas, the potential for commercially viable quantities of reserves to exist and information regarding the results of activities. We assessed this through interviews with key operational and finance personnel and announcements made by the Group to the ASX. • We looked for any inconsistency regarding the existence of reserves to the treatment of E&E and the requirements of the accounting standard. Valuation of Property, plant and equipment; Mine properties under development; and Mine properties A$1,175,558,000 Refer to Notes 10, 13 and 14 to the Financial Report The key audit matter How the matter was addressed in our audit Valuation of Property, plant and equipment; Mine properties under development; and Mine properties is a key audit matter due to the size of the balance, and the Group’s market capitalization being less than the carrying amount of the Group’s net assets at year-end, which increases the possibility of non-financial assets being impaired. As a result we increased our audit effort in this area. We had particular focus on the Tropicana assets which were acquired in April 2021, given that the acquisition was at fair value upon acquisition. We focused on the significant and judgmental forward-looking assumptions the Group applied in its Tropicana fair value less costs of disposal model (the Model), including: • Forecast sales, production output, production costs and capital expenditure. • Forecast gold prices. • Forecast exchange rates. • Discount rate. • Life of mineral reserves and resources. These assumptions require management to apply significant estimates and judgments, which contributes to our conclusion that the valuation of Property, plant and equipment; Mine properties under development; and Mine properties is a key audit matter. Our procedures included: • We assessed for existence of impairment triggers based on operational and financial performance during the year, in combination with our understanding of the Group’s business. • We compared the life of mineral reserves and resources in the Model to the reserves and resources statement commissioned by the Group for consistency with the cash flow forecasts. • We challenged the appropriateness of key assumptions in the Model, including production output, production costs and capital expenditure, using our knowledge of the Group, their past performance and our industry experience. • We evaluated the sensitivity of the Model by considering reasonably possible changes to key assumptions, including gold price and discount rate. In conjunction with our internal valuation specialists, we: • Assessed the Group’s forecast gold prices and foreign exchange rates used to published views of market commentators. • Independently developed a discount rate range considered comparable using publicly available market data for comparable entities. • Assessed the integrity and methodology of the Group’s fair value less costs of disposal model. Valuation of Property, plant and equipment; Mine properties under development; and Mine properties A$1,175,558,000 Refer to Notes 10, 13 and 14 to the Financial Report The key audit matter How the matter was addressed in our audit Valuation of Property, plant and equipment; Mine properties under development; and Mine properties is a key audit matter due to the size of the balance, and the Group’s market capitalization being less than the carrying amount of the Group’s net assets at year-end, which increases the possibility of non-financial assets being impaired. As a result we increased our audit effort in this area. We had particular focus on the Tropicana assets which were acquired in April 2021, given that the acquisition was at fair value upon acquisition. We focused on the significant and judgmental forward-looking assumptions the Group applied in its Tropicana fair value less costs of disposal model (the Model), including: • Forecast sales, production output, production costs and capital expenditure. • Forecast gold prices. • Forecast exchange rates. • Discount rate. • Life of mineral reserves and resources. These assumptions require management to apply significant estimates and judgments, which contributes to our conclusion that the valuation of Property, plant and equipment; Mine properties under development; and Mine properties is a key audit matter. Our procedures included: • We assessed for existence of impairment triggers based on operational and financial performance during the year, in combination with our understanding of the Group’s business. • We compared the life of mineral reserves and resources in the Model to the reserves and resources statement commissioned by the Group for consistency with the cash flow forecasts. • We challenged the appropriateness of key assumptions in the Model, including production output, production costs and capital expenditure, using our knowledge of the Group, their past performance and our industry experience. • We evaluated the sensitivity of the Model by considering reasonably possible changes to key assumptions, including gold price and discount rate. In conjunction with our internal valuation specialists, we: • Assessed the Group’s forecast gold prices and foreign exchange rates used to published views of market commentators. • Independently developed a discount rate range considered comparable using publicly available market data for comparable entities. • Assessed the integrity and methodology of the Group’s fair value less costs of disposal model. Independent Auditor’s Report (continued) Independent Auditor’s Report (continued) 102 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 103 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 Chairman’s Report, Highlights, Review of Operations, and ASX Additional Information are expected to be made available to us after the date of the Auditor's Report. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. 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. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our Auditor’s Report. 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 Chairman’s Report, Highlights, Review of Operations, and ASX Additional Information are expected to be made available to us after the date of the Auditor's Report. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. 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. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our Auditor’s Report. Report on the Remuneration Report Opinion In our opinion, the Remuneration Report of Regis Resources Limited for the year ended 30 June 2022, complies with Section 300A of the Corporations Act 2001. Directors’ responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibilities We have audited the Remuneration Report included in the Directors’ Report for the year ended 30 June 2022. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. KPMG Derek Meates Partner Perth 24 August 2022 Report on the Remuneration Report Opinion In our opinion, the Remuneration Report of Regis Resources Limited for the year ended 30 June 2022, complies with Section 300A of the Corporations Act 2001. Directors’ responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibilities We have audited the Remuneration Report included in the Directors’ Report for the year ended 30 June 2022. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. KPMG Derek Meates Partner Perth 24 August 2022 ASX Additional Information As at 22 September 2022 the following information applied: 1. Securities (a) Fully Paid Ordinary Shares The number of holders of fully paid ordinary shares in the Company is 24,959. 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 Number of shareholders shares 6,677 9,538 4,056 3,387,462 26,644,915 30,963,953 4,425 114,867,585 263 579,162,010 24,959 755,025,925 2,427 432,861 The Company’s fully paid ordinary shares are quoted on the Australian Securities Exchange using the code RRL. The top 20 shareholders are as follows: Name HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED CITICORP NOMINEES PTY LIMITED BNP PARIBAS NOMS PTY LTD J P MORGAN NOMINEES AUSTRALIA PTY LIMITED NATIONAL NOMINEES LIMITED BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 BNP PARIBAS NOMINEES PTY LTD BNP PARIBAS NOMINEES PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED NETWEALTH INVESTMENTS LIMITED MR COLIN PETROULAS VASTE DEVELOPMENTS PTY LIMITED CITICORP NOMINEES PTY LIMITED BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD BNP PARIBAS NOMS PTY LTD MS QIONGQIONG HU NETWEALTH INVESTMENTS LIMITED MR ZIDONG CAO + MRS QIONGQIONG HU BRAZIL FARMING PTY LTD Number of fully paid ordinary Percentage shares held interest 226,838,383 87,816,948 87,164,950 64,664,898 7,529,610 7,407,553 6,285,295 5,617,016 3,852,000 3,169,548 2,492,204 2,000,000 1,900,000 1,815,054 1,765,404 1,739,365 1,606,000 1,542,878 1,353,000 1,300,000 30.04 11.63 11.54 8.56 1.00 0.98 0.83 0.74 0.51 0.42 0.33 0.26 0.25 0.24 0.23 0.23 0.21 0.20 0.18 0.17 TOP 20 SHAREHOLDERS OF ORDINARY FULLY PAID SHARES (TOTAL) 517,860,106 68.59 104 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 105 (b) Unlisted Options At the date of this report, the Company no unissued shares under unlisted options. (c) Unlisted Performance Rights Performance rights issued under employee incentive scheme Unvested 2021 performance rights (Test date: 30 June 2023) Unvested 2022 performance rights (Test date 30 June 2024) Number of holders Number of rights held 6 2 300,087 640,272 Performance rights do not carry a right to vote. Voting rights will be attached to the unissued shares when the performance rights have been exercised. 2. Substantial Shareholders The substantial shareholders as disclosed in substantial shareholder notices received by the Company are: Name Van Eck Associates Corporation 3. On-Market Buy-Back There is no current on-market buy-back of the Company’s securities. 4. Corporate Governance Statement Number of fully paid Percentage ordinary shares held interest 73,372,718 9.72 The Company’s 2022 Corporate Governance Statement has been released as a separate document and is located on our website at http://www.regisresources.com.au/about-us/corporate-governance.html 5. Mineral Resources and Ore Reserves Information on the Group Mineral Resources and Ore Reserves is disclosed in the Review of Operations section commencing on page 24 of this Annual Report. The information in this report relating to the Group Mineral Resources and Ore Reserves is extracted from an ASX Announcement entitled “Annual Mineral Resource and Ore Reserve Statement” dated 8 June 2022 in accordance with the JORC Code (2012) and can be viewed on the Company’s website at: www.regisresources.com.au/investor-centre/asx-announcements The Company confirms that the Group Mineral Resources and Ore Reserves are based on, and fairly represents, information prepared by the Competent Persons named in the relevant market announcement. The Company also confirms that it is not aware of any new information or data that materially affects the information included in the relevant market announcement and that all material assumptions and technical parameters underpinning the Mineral Resource and Ore Reserves estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are represented have not been materially modified from the original market announcement. Competent Persons Statement The table below is a listing of the names of the Competent Persons who are taking responsibility for reporting Regis’ results and estimates. This Competent Person listing includes details of professional memberships, professional roles, and the reporting activities for which each person is accepting responsibility for the accuracy and veracity of Regis’ results and estimates. Each Competent Person in the table below has provided Regis with a sign-off for the relevant information provided by each contributor in this report. Professional Association Competent Company of Code Activity Person Membership Number Employment Activity responsibility A B D D E F G H Mineral Resource Robert Barr MAusIMM 991808 Ore Reserve Jonathon Bayley MAusIMM 110609 Ore Reserve Lilong Chen MAusIMM 220749 Andrew Grieve MAIG 4274 Mineral Resource Mineral Resource Duketon Open Pit Mineral Resources (except Ventnor) Duketon Underground Mineral Resources McPhillamys Mineral Resources Discovery Ridge Mineral Resources Duketon Open Pit Ore Reserves McPhillamys Open Pit Ore Reserves Duketon Underground Ore Reserves Ventnor Open Pit Mineral Resource Regis Resources Regis Resources Regis Resources Cube Consulting Fraser Clark MAusIMM 226390 AngloGold Tropicana Open Pit and Underground Ashanti Mineral Resources Ore Reserve Jo Endersbee MAusIMM 334537 Ore Reserve Glenn Reitsema MAusIMM 228391 Exploration Kevin Joyce MAIG 4718 AngloGold Ashanti AngloGold Ashanti Regis Resources Tropicana Open Pit Ore Reserves Tropicana Stockpile Ore Reserves Tropicana Underground Ore Reserves Exploration Results • MAusIMM = Member of the Australasian Institute of Mining and Metallurgy and MAIG = Member of the Australian Institute of Geoscientists. • • • Information in this report that relates to Mineral Resources or Ore Reserves is based on the information compiled by the relevant Competent Persons and activities listed above. All Regis Resources personnel are full-time employees of Regis Resources Limited; all AngloGold Ashanti personnel are full time employees of AngloGold Ashanti. All the Competent Persons have provided Regis with written confirmation that they have sufficient experience that is relevant to the styles of mineralisation and types of deposits, and the activity being undertaken with respect to the responsibilities listed against each professional above, to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves – the JORC Code 2012 Edition. • Each Competent Person listed above has provided to Regis by e-mail: • • Proof of their current membership to their respective professional organisations as listed above; A signed consent to the inclusion of information for which each person is taking responsibility in the form and context in which it appears in this report, and that the respective parts of this report accurately reflect the supporting documentation prepared by each Competent Person for the respective responsibility activities listed above; and • Confirmation that there are no issues that could be perceived by investors as a material conflict of interest in preparing the reported information. 106 Regis Resources Limited | Annual Report 2022 Regis Resources Limited | Annual Report 2022 107 Corporate Information ABN 28 009 174 761 Directors James Mactier Independent Non-Executive Chairman Jim Beyer Chief Executive Officer and Managing Director Fiona Morgan Independent Non-Executive Director Steve Scudamore Independent Non-Executive Director Lynda Burnett Independent Non-Executive Director Russell Barwick Independent Non-Executive Director (resigned 14 January 2022) Company Secretary Elena Macrides Registered Office & Principal Place of Business Level 2 516 Hay Street SUBIACO WA 6008 Share Register Computershare Investor Services Pty Limited GPO Box D182 PERTH WA 6840 Regis Resources Limited shares are listed on the Australian Securities Exchange (ASX). Code: RRL. Auditors KPMG 235 St Georges Terrace PERTH WA 6000 2022 represented the first full year of ownership of our 30% interest in the Tropicana mine and we remain pleased with its performance, outlook, and strategic fit. 108 Regis Resources Limited | Annual Report 2022 Notes to the Financial Statements (continued)For the year ended 30 June 2022 www.regisresources.com.au I n s i g h t C o m m u n i c a t i o n & D e s i g n

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