Why the Regis (ASX:RRL) share price is up today despite sliding gold price

The Regis Resources (ASX: RRL) share price is up 3.5% today, following positive results at the company’s annual general meeting.

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The Regis Resources Limited (ASX: RRL) share price is up 3.5% at $3.77 in afternoon trading following positive results at the company’s annual general meeting (AGM).

The share price rise comes despite the gold price slipping overnight to US$1,808 per ounce.

Like all gold shares, the Regis share price is closely aligned to the price of the yellow metal. Regis shares hit their 2020 peaks (so far) in late July and early August, when gold was trading above US$2,000 per ounce.

Following today’s gains, the Regis share price remains down 12.9% year-to-date. By comparison the S&P/ASX 200 Index (ASX: XJO) is up 0.1%.

What does Regis Resources do?

Based in Perth, Regis Resources Limited is a gold producer and explorer. The company’s gold operations are located across Australia and in Africa. Its Australian sites include the Duketon Gold Project in the North Eastern Goldfields of Western Australia and the McPhillamys Gold Project in the Central Western region of New South Wales.

Regis shares began trading on the ASX in 1999.

What’s driving the Regis share price up today?

The company announced some positive news and forward guidance to the ASX today. This included record net profit after tax (NPAT) of $200 million with a return on equity (ROE) of 24%. Regis also reported earnings before interest, tax, amortisation and depreciation (EBITDA) of $394 million, up 28%.

Full year dividends came in at 16 cents per share. That represents a dividend yield of 4.2% at the current share price.

In forward guidance, Regis said it expected a year of growth with gold production “heading to” 400,000 ounce per annum. The company plans to lift its production rate above the historic annual rate in the second half of the year.

Addressing the results at the AGM, Regis chair James Mactier said:

An increased gold price and consistent operational performance resulted in a record net profit after tax of $200 million. Regis continued to be a leader in the gold industry in the fundamental business metrics of profitability per ounce of production, earnings per share, dividend yield and return on equity.

At the same time, we utilised our strong operational cashflows to invest in future production growth through capital and exploration expenditure and reduced our hedge book, whilst maintaining a strong cash balance and debt free status.

Our strong financial position and outlook, enabled the Board to declare fully-franked dividends of 16 cents per share for the year, totalling $81 million. Total dividends declared by Regis now amount to $488 million.

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Motley Fool contributor Bernd Struben 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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