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Regis Resources Ltd (ASX: RRL): Neutral pricing – Attractive dividend yield but with limited growth opportunities

The projected price for Regis Resources is A$4.53 based on a discount rate of 7.24% weighted average cost of capital using the discounted cash flow model. As of 8 June 2018, the share price of Regis Resources is A$4.84. This translates to a downside of 6% from the current price. We maintain a neutral position on the shares of Regis Resources. Although the company has issued large dividends in recent years, their growth strategy might not be as robust as its peers in the gold mining industry.

Summary

  • Current financial position is strong
  • FY2014 impairment losses causing an overreaction in the stock market
  • Strong production levels for FY2018
  • Positive industry outlook
  • Current exploration efforts indicating weak long-term growth strategy
  • Attractive dividend yield
  • High dividend payout ratio indicating limited growth opportunities

The Business

Regis Resources is a gold mining and exploration company listed on the ASX. The main gold project of Regis Resources is the Duketon Gold Project which is located in the North Eastern Goldfields of Western Australia. The Duketon Project has in excess of 1,000 square kilometres of exploration and mining tenure. The project area consists of two operating centres being the Duketon North Operation (DNO) and the Duketon South Operations (DSO).

For FY 2017, the DNO made up 31% of the revenue of Regis Resources while the DSO made up the remaining 69%. However, the All-In-Sustaining-Costs (AISC) for the DSO is much higher than DNO, which means that the DNO is more profitable than the DSO.

Most of the mines belonging to Regis Resources are open pits, which means that hauling distances are short (as compared to an underground mine). The operating costs for Regis is lower than some of its peers which operate underground mines. This places Regis in a better position as its margins will be higher than its peers.

Strong Financial Position

Regis.jpg

Source: Regis Resources Limited AR’17[3]

Regis Resources has been recording strong financials over the past 3 years. Revenue growth rate has been decreasing but it still high at 8% in FY 2017. Net profit after tax has been increasing at a high rate over the past 2 financial years. Regis Resources recorded a 29% increase in profit after tax in FY2016 and a 24% increase in FY2017[4]. In FY2017, Regis Resources recorded revenue at A$544m and Profit after tax at A$138m.

Regis.jpg

Source: Regis Resources Ltd AR’17

Dividends per share have also increased from 6 cents per share in FY2015 to 15 cents per share in FY2017. The current dividend yield for Regis Resources is 4.68%[5]. The dividend yield is attractive and coupled with the large capital gains within the last 2 years, it seems that Regis shares are performing well in current times. However, we shall look at the other qualitative factors to determine if Regis shares are correctly priced.

Key financial ratios

2013 2014 2015 2016 2017 5y avg
ROA 23% -32% 17% 20% 19% 9.59%
ROE 27% -46% 21% 25% 25% 10.40%
Asset Turnover 67% 80% 91% 86% 80% 0.81
Profit Margin 35% -39% 19% 23% 24% 12.4%

Source: Author’s calculations

Bar FY2014, Regis Resources has delivered excellent financial results. ROE and ROA are extremely high over the past 3 financial years. The industry ROE is 11%[6], while Regis has delivered ROE over 20% over the last 3 financial years. Profit margins are at healthy levels over the past 3 financial years as well.

However, asset turnover has been decreasing over the last few years. This can be attributed to the increase in mine properties to increase revenue, as well as the increase in exploration and evaluation assets. Even still, the asset turnover of Regis is approximately equal to the industry average asset turnover is 0.84[7]. Even though asset turnover has been decreasing, we see positive signs that the company is attempting to generate new mines. This approach taken by the management is positive and paints a positive outlook of their financial position in the near future.

Overall, Regis Resources has recorded solid financials for the past 3 financial years and looks poised to continue their strong financial performance in the upcoming financial year.

2013 2014 2015 2016 2017 5y avg
D/E 0% 12% 5% 0% 0% 3%

Source: Author’s calculations

D/E was unusually high at 12% for FY 2014. This can be attributed to the huge losses they sustained in FY2014. In response to the huge losses sustained, the management extended its corporate loan facility with Macquarie Bank Limited to A$70m, of which A$40m was undrawn[8]. Soon after the recovery of Regis Resources, the firm has undertaken a financial position with no debt, reverting to the original financial position back in FY2013. This highlights the management’s intention to refrain from taking on debt onto the balance sheet. This is also a positive sign as the flexibility of the management shows that they are still willing to take on debt to steer the company out of financial trouble should the need arises.

As of March 2018, the company has cash and equivalents of A$167.9m on its balance sheet. This means that there is an availability of cash for the company to tap on exploration opportunities and purchase expansionary capital in order to increase production and productivity levels. Coupled with the flexibility of the management to undertake loans, this indicates that the company will be able to cope with future financial distress quickly and effectively if it arises.

FY2014 Impairment Losses

Regis Resources had been performing exceptionally in the past 3 financial years. However, in FY2014, Regis Resources suffered a huge loss of A$148m. The company had recorded a A$202.7m[9] impairment loss for FY2014. It was a result of a combination of factors including operational challenges and a fall in gold prices, and most importantly, the major flooding event at Duketon in Feb 2014. The event was caused by abnormally heavy rains and its mining activities had to be suspended for four to six weeks.[10]

Figure: Regis Resources Limited share price from 2013 to 2018

Regis.jpg

Source: Bloomberg

As a result, the share price of Regis Resources dropped from an initial A$3 in February 2014 to its lowest level at A$1.11 on June 2015. Since then, the share price has rebounded spectacularly, with its current price at A$4.84 as of 8 June 2018. In the past year alone, Regis Resources has seen a 40%[11] increase in share price. We shall explore other qualitative factors to determine if there was an overreaction in the market.

Strong production rates for FY 2018

Regis Resources Sep’17 Quarter Dec’17 Quarter Mar’18 Quarter Total
Ounces produced / (oz) 91,921 92,113 85,331 269,365
AISC / (A$/oz) 861 855 906 873

Overall results over the past FY

Source: Regis Resource Limited March 2018 Quarterly Report

In March 2018 quarter, gold production for Regis was 85,331 oz at an All-In-Sustaining-Costs (AISC) of A$906/oz for Regis Resources. This was a 7% decrease from previous quarter’s production of 92,113 oz. This can be considered a strong performance given the adverse weather, as there was a total of 22 rain days during the quarter which disrupted mining operations. Furthermore, it was previously stated in the December 2017 quarterly report that production was expected to be lower as mining of the Gloster pit (located at the DNO) was moving back to the average grade from the higher-grade zone.

The year to date production was 269,365 oz with an AISC of A$873/oz. Taking that into account, the full year production forecast is expected to be 355,000 – 360,000 oz which is at the upper end of the guidance initially stated at the start of FY2018. This represents an approximately 10% increase in terms of gold production as compared to FY2017. Regis Resources has performed strongly by keeping its year to date AISC at A$873/oz, which is way lower than the initial forecast of A$940-A$1,010/oz. This is also a significant improvement from an AISC of A$945 as recorded in FY2017.

Results from DSO and DNO

Regis.jpg

Source: Regis Resource Limited Various Quarterly Reports for FY2018

As the mining of the Gloster pit (in DNO) was moving back to the average grade, production was expected to be lower for March 2018 quarter. Moving forward, the company expects that the production at the DNO will be consistent with production levels in March 2018 quarter.

Despite experiencing 22 rain days in the March 2018 quarter, DSO was able to maintain its production levels close to production levels in December 2017 quarter. Furthermore, Regis was able to lower the AISC of DSO to A$916/oz. Moving forward, production for DSO in the June 2018 quarter is expected to increase as higher-grade ore from the pits at Erlistoun (in DSO) is mined and processed.

Future outlook

Production has been strong for the current financial year and we expect that to continue for the near future. Furthermore, the AISC for the current financial year looks set to be lower than the forecasted levels of A$940 – A$ 1,010/oz. A higher margin ultimately means that company will be able to generate more value for their shareholders. Furthermore, with the company’s exploration efforts aimed near the surface of the Earth as explained under “Exploration efforts”, we believe that the company will be able to control cost inflation in the next few years. This will be reflected in the valuation of Regis Resources.

Industry Outlook

Supply side

Figure: Gold production change year-on-year from 2008 to 2017

Regis.jpg

Source: World Gold Council

Gold production growth is facing a year-on-year decline. For 2017, gold production was just fractionally higher as compared to production levels in 2016. McKinsey’s forecasts based on qualitative factors suggests that declining ore quality and limited accessibility of new deposits will squeeze supply in the coming years, potentially increasing the prices of commodities in the future.[12]

Demand side

Figure: Year-on-year annual gold demand by segment

Regis.jpg

Source: World Gold Council, Metals Focus

In 2017, the year-on-year demand for gold dropped 7% to 4070 tons. However, this was due to a large decrease in demand which are largely investment related. The demand for gold from gold-backed ETFs decreased 63% year-on-year. This can be attributed mainly to the strong performance in the equity markets, particularly in the US.

We shall put our focus of the analysis on the demand for gold jewelry as it is the most significant segment which determines gold demand. Full year gold jewelry demand increased by 4% in 2017, which is a positive sign for gold demand in the market. We shall take a closer look at the major sources of demand for gold jewelry.

Demand for gold jewelry in India

India has seen a 4% increase in demand for gold jewelry in 2017. India’s gold imports had surged 67 percent in 2017 from the previous year amid a rebound in rural retail demand. The scrapping of 500 and 1,000-rupee banknotes, which accounted for 86 percent of the cash in circulation, was the major factor in the increase in demand for gold in India as consumers look for commodities like gold to ensure the tangibility of their assets[13].

Demand for gold jewelry in China

China saw a 3% year-on-year increase in annual gold jewelry demand. This is due to the trend for ‘premium’ gold jewelry products. Retailers are shifting their products to offer more “luxury products”. Furthermore, retailers in China are tapping on online ecommerce platform to boost their sales. This provides a bridge between the buyers and the consumers, which is especially important for people not living in the main cities in China. By tapping into the whole market of China, the demand for gold jewelry in China will increase significantly. Therefore, the outlook for Chinese gold jewelry is positive.

Demand for gold jewelry in US

Annual demand for gold jewelry gained 3% year-on-year. The improving economic environment in the US has continued to spur demand for luxury goods such as gold jewelry. Even though demand for gold jewelry is increasing, it is still way off previous levels, so there is definitely room for growth in the demand for gold jewelry in US.

Overall industry outlook

Figure: Gold prices from 2013 to 2018

Regis.jpg

Source: Bullionvault

Gold prices have increased steadily over the past 5 years, albeit with some volatility. By incorporating the demand and supply side analysis, we can conclude that the future gold prices are likely to increase slightly in the near future. This bodes well for the companies in the gold mining industry as an increase in prices of commodities means a higher profit margin. However, based on McKinsey’s reports, mining revenues could grow at 4 to 6 percent over the next decade, albeit at lower margins due to cost inflations.

Cost inflation

Based on McKinsey’s outlook on the mining industry, cost inflation due to internal factors will plague all commodities. Most mines will suffer from declining ore grades and deteriorating mine conditions, such as deeper shafts and longer hauling distances. McKinsey estimates that inflation in terms of costs will average 4 to 7 percent going forward[14].

Depreciation of the Australian Dollar

The weaker Australian dollar against the US dollar will continue to boost the gold sector as this increases the margins for gold miners. This will lead to mine expansions and increased exploration activities in Australia[15], which will boost gold mining revenues in the future.

Overall, the industry outlook for gold is slightly positive, with good growth prospects but this will be hindered by cost inflation. In particular, the industry outlook for Australia is positive as we take into account the effects of the weaker Australian dollar against the US dollar. This paints a positive outlook on the gold mining sector in Australia. We shall determine if Regis Resources is able to ride this opportunity to add value to their shareholders.

Exploration efforts

Table: Exploration Highlights

Regis.jpg

Source: Regis Resource Limited March 2018 Quarterly Report, Author’s calculations

The quality of ore grade is set by the World Gold Council[16]. A high-quality mine is defined as having a gold ore density above 8 grams per ton (g/t), while a low-quality mine is defined to be below 4 g/t. Based on the table above, there are a few high-quality gold deposits discovered in the exploration efforts.

As seen from the table, Regis Resources is focusing on near-surface gold deposits on its current mines. Other gold mining companies in Australia have drilled more than 3km below the surface to find gold deposits[17]. For the case of Regis, the lower operating costs due to the shorter hauling distances will be able to make up for the substandard ore grades since operating costs will be substantially lower than its peers.

Overall, Regis Resources has been focusing its exploration efforts in its current mine area. The current exploration results paint a positive picture of the potential revenue and profits that Regis will be able to generate in the near future. However, the exploration efforts are all within its current mines, hence there is no long-term plan in place to look at new areas for mine development. This indicates a lack of long-term growth strategy for the company. In the long term, as the company delves deeper to obtain gold deposits, operating costs will increase significantly as stated under “Cost inflation”. Therefore, we shall use a more prudent approach when determining the terminal value of the company when performing the valuation.

Business Risks

Ability to generate revenue in the long term

Figure: Select Countries – Number of Operational Gold Mines and New Projects

Regis.jpg

Source: BMI Research

Current exploration efforts in the Duketon region indicate that management has a robust strategy in place to replace their current mines and generate revenue in the short term. While its current exploration efforts are sufficient to allow Regis to generate revenue in the near future, its peers are conducting exploration efforts more aggressively by exploring new regions to generate additional revenue in the future. This can be seen from the figure above where the number of new projects is larger than the operational mines. To contrast, Newmont Mining Corporation[18], Newcrest Mining Limited[19] and Northern Star Resources Limited[20] have been aggressively focusing its exploration efforts in the highly prospective Tanami region. This suggests that the long-term growth strategy of Regis Resources is not robust as compared to its peers in the industry.

Increasing operating costs

McKinsey forecasts expects that deeper shafts and longer hauling distances will cause margins to be squeezed in the future. [21]

We assume that operating expenses/revenue will slowly increase over next few years as we take the cost inflation issues into account. We expect a lower cost inflation than as stated by McKinsey as we believe that the company will not face longer hauling distances in the near future as their current mines are mostly open pits and hence, we believe that Regis can control the cost inflation at acceptable levels. This places Regis at a better position than its peers in terms of controlling operating costs. In the long term, we will expect the increase in operating costs to be approximately equal to the rate stated by McKinsey, as the company delves deeper below the surface to mine gold.

Valuation

Dividend payout ratio analysis

The dividend yield of Regis is 4.68%[22], which is an attractive dividend yield. The dividend payout ratio[23] of the company is high (60% in FY2017), which suggests that the company is stable and has limited growth opportunities. For a company with low growth opportunities, it is likely that the dividend payout ratio will be high, and that equity reinvestment rate will be low, as it implies that the company is not confident of reinvesting its net income to increase the value of the company at a rate higher than its cost of capital. This seems to be the case for Regis Resources as the company has only been focusing on its current operations at Duketon, which indicates a lack of a long-term growth strategy.

However, the company was able to perform well for the last 3 financial years. Therefore, we assume that the company will be able to sustain high growth for another 5 years, before its growth rate slows down, and finally reaching a perpetual stable growth period.

Growth till 2028 and beyond

Current year production results as indicated under “Overall results over the past FY” indicate that Regis Resources will be able to attain a year-on-year revenue growth of 10% in FY2018. We assume that Regis will be able to attain a revenue growth of 10% over the next 5 years as indicated by its strong financials and success of current exploration efforts. As the mining industry gets increasingly saturated in the future, the industry growth will slow down to levels reflected by the economy growth rate. As the company transitions from a high growth phase to a stable growth phase, we assume a revenue growth rate of 5% in the next 5 years, as indicated by McKinsey (under “Overall industry outlook”). As the company lacks a long-term growth strategy to generate new mines in other areas, we use a slightly prudent approach and assume that the terminal growth of the company is 2% which is slightly lower than Australia’s 5-year average GDP growth rate at 2.43%[24].

Operating expenses

Current year AISC recorded is A$873, which is significantly lower than the AISC of A$945 recorded in FY2017. Therefore, we assumed the operating expenses to be lower than that recorded in FY2017, before slowly increasing year-on-year as stated under “Increasing Operating Costs”. As the company begins to extract gold ore from further underground, we would expect operating costs to increase in the future. We have assumed operating costs to increase at a quicker pace as the company transitions to the stable growth period.

WACC

Regis.jpg

Source: Bloomberg & Author’s calculations

The bottom up beta approach was used in the calculation of the cost of equity. The D/E ratio used was 0% as the management has shown a preference to keep the balance sheet debt free. Therefore, the cost of capital for the company shall be equal to its cost of equity. The guideline companies are listed in “Relative Valuation”.

The guideline companies are chosen based on their business. Furthermore, the revenue of the guideline companies should be between 20% to 500% (arbitrarily chosen) to allow for meaningful comparison between the guideline companies and Regis Resources. Based on the reasons above, we have excluded Goldroad Resources Ltd and Newcrest Mining Ltd.

DCF analysis

We used a WACC of 7.24% and a terminal growth rate of 2.00%. The intrinsic value of Regis Resources is measured to be A$4.53. This represents a 6% downside from the current price of A$4.84.

Regis.jpg

Source: Author’s calculations

Sensitivity Analysis

Operating Expenses/Sales

Regis.jpg

Source: Author’s calculations

We have conducted a sensitivity analysis with regards to the operating expense over sales ratio. From the table, operating expense over sales is a significant factor in determining the share price of Regis Resources. Regis has performed exceptionally well by keeping its AISC very low for FY2018. This strongly indicates that the company will be able to increase its value by keeping operating costs low. However, we have to take into account that current mines belonging to Regis Resources are open pit mines, which require lower operating costs. In the future, Regis will be required to conduct underground mining or find new gold deposits which not be smooth-sailing. This will increase the operating costs in the future. Our assumptions on operating expense over sales incorporates the above stated. Therefore, we believe that the price of A$4.53 is a fair valuation for Regis Resources.

Relative Valuation

Regis.jpg

Source: Bloomberg & Author’s calculations

We have excluded GoldRoad Resources Limited and Newcrest Mining Limited in determining the fair value of Regis Resources as the revenue of these companies is not within 20% to 500% of the revenue of Regis Resources, hence such comparison might not be meaningful.

Based on the TEV/EBIT ratio for guideline companies, Regis is correctly priced by the market. The fair value based on the average TEV/EBIT of the guideline companies is A$4.81. Regis Resources is able to keep operating costs low as their mines are open pits, hence their margins will be high. In that case, it is expected that the relative valuation by TEV/EBIT produces a favourable valuation for Regis Resources.

However, when using P/E ratio, it suggests that the market thinks that Regis Resources is overvalued. The average P/E ratio of the guideline companies indicate that the price of Regis Resources should be A$4.47, as compared to the market price of A$4.84. Therefore, this implies that the market is bullish on the growth prospects of Regis Resources. However, based on the qualitative analysis performed earlier under “Dividend payout ratio analysis”, the growth prospects of Regis Resources are not as rosy as the market believes it to be. Therefore, the P/E implied share price does provide an accurate indication of the valuation of Regis Resources, implying that the shares of Regis are overvalued.

Regis.jpg

Source: Author’s calculations

Conclusion

Based on the overall analysis, the shares of Regis Resources are overpriced. This can be attributed to an overreaction in the market due to two main factors. Firstly, the dividends paid have greatly increased over the past two years, recorded at 6 cents in FY2015, 13 cents in FY2016 and 15 cents in FY2017. The interim dividends declared for FY2019 is 8 cents[25]. Secondly, as the outlook on the gold mining industry in Australia is positive, it is reasonable to believe that Regis Resources will be able to continue posting strong financial results in the coming years. There is an overreaction in the market, especially regarding the implicit assumptions on the growth rate of the company in the long term. This is further validated by the P/E implied share price as stated under “Relative Valuation”.

With that being said, the economy is performing well and coupled with the positive outlook for the gold mining industry in Australia, it is unlikely that the share prices of Regis Resources will decrease in the short term. However, in the long term, as its current open pit mines approaches the end of their term, the decrease in income will translate to lower dividends, hence the share price of Regis will be likely to decrease at a later point in time.

Overall, we place a neutral position on Regis Resources Limited, despite the valuation and overall analysis. This is because its current dividend yields are very attractive and we feel that the management is capable of dealing with any potential financial distress effectively. Furthermore, with the positive outlook of the gold mining industry in Australia, it is unlikely that the share price of Regis Resources will converge to its intrinsic value in the near future.

Appendix

Appendix A

Australia: Real gross domestic product growth rate from 2012 to 2017 (compared to the previous year)

Average growth rate past 5 years = [2.27%+2.65%+2.47%+2.62%+2.16%]/5 = 2.434%

Source: https://www.statista.com/statistics/263602/gross-domestic-product-gdp-growth-rate-in-australia/

Guideline Companies TEV/EBIT P/E ROE(%) ROA(%) Asset Turnover Beta (5-yr daily returns)
Evolution Mining Ltd 17.43 26.52 11.83 8.48 0.58 0.687
St Barbara Ltd 9.51 13.08 41.37 25.91 1.06 0.556
Northern Star Resources Ltd 13.61 20.51 40.36 25.50 1.01 0.639
Resolute Mining Ltd 6.76 7.70 25.89 20.51 0.81 0.782
Sandfire Resource Ltd 8.15 13.16 19.03 13.66 0.94 1.32
Saracen Minerals Hldg Ltd 22.68 28.65 10.23 7.41 1.10 0.551
OceanaGold Corp 8.58 8.95 12.15 8.67 0.37 1.064
Westgold Resources Ltd 53.85 32.34 12.15 8.67 0.37 0.320
Newcrest Mining Ltd 27.94 54.14 4.25 2.70 0.31 0.661
FV based on TEV/EBIT FV based on P/E ROE (%) ROA (%) Asset Turnover
Average A$4.81 A$4.47 22.98 15.70 0.84
1st Quartile A$3.16 A$2.36
Median A$3.69 A$3.48
3rd Quartile A$6.77 A$7.01

Appendix B

Guideline companies

Source: Bloomberg and Author’s calculation

Sources referenced

Ajay Lala et.al. (2015). Productivity in mining operations: Reversing the downward trend. Retrieved from https://www.mckinsey.com/industries/metals-and-mining/our-insights/productivity-in-mining-operations-reversing-the-downward-trend

Australian Mining (2018). Newcrest builds Tanami region presence in search of gold discoveries. Retrieved from https://www.australianmining.com.au/news/newcrest-builds-tanami-presence-search-gold-discoveries/

BMI Research (2018). Industry trend analysis – Gold: Rising prices to prompt growth. Retrieved from BMI Research (From NUS materials library)

Bullionvault’s Gold Price Chart. Retrieved from https://www.bullionvault.com/gold-price-chart.do

Cole Latimer (2014). Regis Resources suspends operations as mines flood. Retrieved from https://www.australianmining.com.au/news/regis-resources-suspends-operations-as-mines-flood/

Jarrod Lucas (2018). Australia’s major gold miners digging deeper underground in hunt for major discoveries. Retrieved from http://www.abc.net.au/news/2018-03-04/australian-gold-miners-dig-deeper-looking-for-major-discoveries/9495184

Laura He et.al. (2017). China retains crown as world’s top gold consumer, amid softening yuan and financial market volatility. Retrieved from http://www.scmp.com/business/markets/article/2065396/china-retains-crown-worlds-top-gold-consumer-amid-softening-yuan

Rajendra Jadhav (2018). India gold imports surge 67 percent in 2017 on restocking, retail demand – GFMS. Retrieved from https://www.reuters.com/article/india-gold-imports/india-gold-imports-surge-67-pct-in-2017-on-restocking-retail-demand-gfms-idUSL4N1OX1PQ

World Gold Council (2018). Gold Demand Trends Full Year 2017. Retrieved from https://www.gold.org/research/gold-demand-trends/gold-demand-trends-full-year-2017/supply

World Gold Council (2018). 2017: Q4 Recovery fails to mitigate full-year decline. Retrieved from https://www.gold.org/research/gold-demand-trends

  1. All factual statements not referenced are sourced by Regis Resources Annual Report FY 17 or Quarterly Activities Report sourced in FY2018
  2. Under “Valuation
  3. Net Profit After Tax for FY2014 was (A$147.8m). The recorded A$55m as per the illustration was the profit after tax, prior to impairment losses
  4. Author’s calculations
  5. Retrieved from http://www.morningstar.com/stocks/XASX/RRL/quote.html
  6. Referenced from Veer Mallick (2018). If Regis Resources Limited’s ROE of 27.45% Sustainable? Retrieved from https://simplywall.st/stocks/au/materials/asx-rrl/regis-resources-shares/news/is-regis-resources-limiteds-asxrrl-roe-of-27-45-sustainable/
  7. Based on guideline companies in Appendix B
  8. Regis Resources Limited FY2014 Annual Report
  9. Regis Resources Limited FY2014 Annual Report
  10. Retrieved from https://www.australianmining.com.au/news/regis-resources-suspends-operations-as-mines-flood/
  11. Author’s calculations based on adjusted closing stock prices
  12. https://www.mckinsey.com/industries/metals-and-mining/our-insights/is-there-hidden-treasure-in-the-mining-industry
  13. https://www.reuters.com/article/india-gold-imports/india-gold-imports-surge-67-pct-in-2017-on-restocking-retail-demand-gfms-idUSL4N1OX1PQ
  14. https://www.mckinsey.com/industries/metals-and-mining/our-insights/is-there-hidden-treasure-in-the-mining-industry
  15. Retrieved from BMI Research – Industry Trend Analysis – Gold: Rising Prices to Prompt Growth
  16. https://www.investopedia.com/ask/answers/022315/what-does-grade-gold-mine-refer.asp
  17. http://www.abc.net.au/news/2018-03-04/australian-gold-miners-dig-deeper-looking-for-major-discoveries/9495184
  18. Retrieved from BMI Research – Industry Trend Analysis – Gold: Rising Prices to Prompt Growth
  19. https://www.australianmining.com.au/news/newcrest-builds-tanami-presence-search-gold-discoveries/
  20. Retrieved from Northern Star Resources Limited Annual Report FY2017
  21. https://www.mckinsey.com/industries/metals-and-mining/our-insights/is-there-hidden-treasure-in-the-mining-industry
  22. Retrieved from http://www.morningstar.com/stocks/XASX/RRL/quote.html dated 6 June 2018
  23. Dividend payout ratio was 60.10% in FY2017 (Author’s calculations)
  24. Refer to Appendix A
  25. Regis Resources Limited March 2018 Quarterly Report

 



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