Regis Resources Limited

ASX:RRL

Regis Resources Limited

ASX:RRL
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$2.03 (-0.5%)
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Forum Topics RRL RRL Hedge Book now CLOSED OUT!

Pinned straw:
Bear77
Last edited 5 months ago

11-Dec-2023: Regis Resources (RRL) had a diabolical hedgebook that would have seen them continuing to sell a good portion of their gold at around half the current spot price through until the middle of 2024. However they've just closed that hedgebook out - see here: Closure-of-Hedge-Book.PDF

That's a very positive move by a management team that has made their fair share of mistakes. It's not the same management team who were there during the Duketon build-out when Regis were fast growing and also one of the best dividend paying gold companies in Australia - no, those people all ended up at either Capricorn (CMM) or Emerald (EMR) - see screenshots from their websites below - and that former management team would NOT have signed up for such low priced gold hedges that didn't even gurantee profitability in the recent inflationary cost environment. But this lot - that are in charge now - have finally bitten the bullet and closed out all of their hedges - and are now fully exposed to the high spot price.

Not before time!

Their (RRL's) share price didn't rise, but it also didn't fall today, which was actually a good result, because there was a sea of red across the Aussie Gold Sector.

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Here's where the early Regis management (prior to 2020) ended up. Some of them were together at Equigold before Regis:

I've highlighted some of the Regis experience in orange and Equigold in blue.

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And here is a link to the list of current Regis Board and Management: Our Leadership - Regis Resources

DYOR if you are interested enough. Disc: I hold Regis (RRL) in my SMSF as part of a group of gold miners, but nowhere else currently. I hold CMM shares here on SM, and have held both CMM and EMR in real money portfolios previously, but do not currently hold any shares in either of them.

I am bullish on Regis IF they can get McPhillamys (in central NSW) up and running, but they're a few years away from that at this point. This news today about them now being unhedged is a definite positive. Imagine how much better off they'd be now if they'd done this last year!
Solvetheriddle
5 months ago

@Bear77 isnt the closure of the hedge just a wash in value, since they had to pay full price to close it out? A$98m about $1100 /oz. Certainly will change the accounting going forward i suspect. with the hedge book being a one-off, maybe below-the-line write off and the unencumbered revenue line now looking a lot better. having said that it will probably attract more attention to the stock even though they are carrying more debt, since gold bulls are likely buyers, who want unlimited upside, i suppose that makes sense.

disc small exposure held

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Bear77
5 months ago

Sure they took the hit now instead of continuing to suffer through monthly installments @Solvetheriddle - so this move came at a significant cost to them now, but that says to me that they are finally bullish on the gold price from here and that they are sick and tired of every analyst who covers the stock bringing up their hedgebook and the rediculously low prices they had forward sold their gold at as a huge negative for the company. Having removed that as a negative, despite the cost of doing it, which was significant, can only be positive in my view.

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