Why the Regis Resources Limited share price just printed a multi-year high

The Regis Resources Limited (ASX: RRL) share price is up 1% to $4.80 on Wednesday, after the gold mining company gave a positive update for the third quarter of FY2018. Earlier today, the stock hit a multi-year high at $4.86

Regis produced 85,000 ounces of gold in the March 2018 quarter, 8% less than in the previous quarter, but still enough for the company to refine its full-year production guidance to a range of between 355,000 ounces and 360,000 ounces – at the upper end of the previous forecast.

Year-to-date all-in sustaining costs (AISC) of production of $873 per ounce appear particularly low if compared with the company’s FY2018 guidance of between $940 and $1,010 per ounce, or with that of $1,100 to $1,150 per ounce of industry peer Saracen Mineral Holdings Limited (ASX: SAR). Its quarterly result was positively received by the market yesterday.

Regis’s margins are particularly wide, with gold sold at an average $1,688 per ounce during the quarter, which is about $100 per ounce higher than Saracen’s price. Operating cash flow of $71 million allowed the company to maintain its cash balance almost intact at $168 million, while paying an interim dividend of 8 cents per share.

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Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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