The Regis Resources Ltd (ASX: RRL) share price has fallen 1% lower this morning despite announcing a successful pre-feasibility study which delivered increased ounces and lower all-in sustaining cost (AISC).
What did Regis Resources announce this morning?
Regis’s update was very favourable for the company and should see the share price climb higher with higher ounces, lower all-in sustaining cost (AISC) and strong pre-feasibility study results.
The highlights of this morning’s announcement include:
- Commencement of underground mine development at Rosemont with decline development advanced to over 150 metres.
- Underground Mineral Resource increases of 37% to 1.7 megatonnes (Mt) at a grade of 5.6 grams per tonne (g/t) of gold for 314,000 ounces.
- A maiden high-grade Central Zone Mineral Resource of 0.2Mt @ 7.5 g/t of gold for 50,000 ounces has been defined.
- Maiden Ore Reserve estimate of 0.6Mt @ 6.4 g/t of gold for 123,000 ounces which underpins the first years of production
- The group’s pre-feasibility study returned increased ore tonnes, grade and ounces for a longer life mine and lower AISC of $1,120 per ounce
- Underground mine production estimated to contribute 480,000t – 600,000t of gold per annum.
Is Regis Resources in the buy zone?
The Regis Resources share price is up 4.8% so far this year in what has been a volatile start to the year for ASX gold miners.
Global volatility in gold prices and rising all-in sustaining costs (AISCs) has seen the share prices of St Barbara Ltd (ASX: SBM) and Northern Star Resources Ltd (ASX: NST) move into the red so far in 2019.
However, Regis is currently trading on an earnings multiple of 14.5x which makes it an attractive relative value play compared to the likes of Northern Star (28.6x), but a recent freefall for St Barbara has pushed its P/E ratio to just 7.4x earnings.
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Motley Fool contributor Lachlan Hall 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.