The Regis Resources Ltd (ASX: RRL) share price is having a difficult time on Thursday.
In morning trade, the ASX 200 gold share crashed as much as 15% to $1.78.
Why is this ASX 200 gold share crashing?
Investors have been selling down ASX 200 gold shares following the release of the company's quarterly production update.
Here's a summary of how it performed:
- June quarter gold production of 122.5koz
- Quarterly all-in sustaining cost (AISC) of $1,851 per ounce
- Average quarterly realised price of $2,669 per ounce
- FY 2023 gold production of 458.4koz at an AISC of $1,805 per ounce
- Average FY 2023 realised price of $2,471 per ounce
Regis Resources' June quarter gold production of 122.5koz at an AISC of $1,851 per ounce comprises:
- Duketon production of 90.6koz with an AISC of $2,026 per ounce
- Tropicana production of 31.9koz with an AISC of $1,259 per ounce
As you can see above, the company's Duketon operation has weighed heavily on the company's performance in FY 2023. Originally, management was expecting an ASIC of $1,550 to $1,650 per ounce for the year from Duketon.
This has offset the good work at Tropicana and led to the company's full-year AISC increasing 16% year on year.
Outlook
Unfortunately, management doesn't expect its costs to reduce in FY 2024 and is forecasting further increases.
The ASX 200 gold share is targeting total production of 415,000 to 455,000 ounces with an AISC of $1,995 to $2,315 per ounce. The latter represents an increase of 10.5% to 28.2% over FY 2023's AISC. Though, this includes ~$200 per ounce of non-cash stockpile inventory adjustment.
Regis Resources' Managing Director, Jim Beyer, remains positive on the future. He said:
It was pleasing to deliver a strong quarter of gold production and cash generation to finish the year. With commercial production declared at Garden Well underground (Duketon) and Havana open pit (Tropicana) the Company continues the transition out of its investment phase at these operations. On completion of hedge book deliveries by the end of this financial year, at current gold prices, we are looking forward to a significant increase in cash flow.
