Join our daily newsletter At The Bell to receive exclusive market insights
- Regis Resources (ASX:RRL) closes out all remaining commitments on its existing gold sales hedge book
- The company has become a fully unhedged gold producer
- Closure results in a boost of more than $180 million in annualised pretax cash flows
- Regis Resources last traded at $1.89
Regis Resources (ASX:RRL) has made a decisive move by closing out all remaining commitments on its existing gold sales hedge book.
Effective December 11, 2023, the company has become a fully unhedged gold producer, exposing itself to the full potential of spot gold prices.
As of November 2023, Regis held an outstanding hedge book balance of 70,000 ounces at $1571 per ounce. During December, the company delivered 7000 ounces into the hedges and closed out the remaining 63,000 ounces at a total cost of $98 million.
This transaction was fully funded by Regis’s existing cash and bullion reserves, which stood at $250 million as of September 30, 2023.
This strategic decision marks a significant financial milestone for Regis Resources, generating an increase of more than $180 million in annualised pre-tax cash flows.
This enhancement is primarily driven by a substantial margin boost, exceeding A$410 per ounce at current spot gold prices.
“Liberating Regis from its long-standing hedge book is a very significant milestone for the Company,” Regis Resources Managing Director, Jim Beyer said.
“It allows Regis to fully realise the cash-generating ability of our existing assets, which have now entered a cash-building phase after significant investment.
“Regis has a high-quality portfolio, with two 10-year+ life projects all in Australia and now fully exposed to spot gold prices.”
Regis Resources last traded at $1.89.
