{"id":51761,"date":"2014-05-26T02:40:40","date_gmt":"2014-05-26T06:40:40","guid":{"rendered":"http:\/\/countingpips.com\/?p=51761"},"modified":"2014-05-26T07:00:29","modified_gmt":"2014-05-26T11:00:29","slug":"why-the-regis-resources-share-price-dropped-today","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/05\/why-the-regis-resources-share-price-dropped-today\/","title":{"rendered":"Why the Regis Resources Share Price Dropped Today"},"content":{"rendered":"
May 26, 2014<\/div>
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By MoneyMorning.com.au<\/u><\/a><\/p>\n

What Happened to the Regis Resources Share Price?<\/h2>\n

Shares of Regis Resources [ASX:RRL] <\/strong>got smashed by 7.31% on Monday, closing at $1.58. This was the lowest price since 7 October 2010. This follows Regis\u2019 25% share price decline<\/a> last Friday. <\/p>\n

Why did this happen to the RRL Share Price?<\/h2>\n

Regis Resources is a gold production and exploration company with projects in the Eastern Goldfields of Western Australia. Its main projects include Moolart Well, Garden Well, Erlistoun and Rosemont.<\/p>\n

For a number of years, Regis has been one of the better managed and lowest cost gold producers on the ASX. In fact, the company paid out $74 million in dividends in December 2013. This pretty much left the company\u2019s balance sheet exposed to no cash and significant debt. <\/p>\n

Unfortunately for the company, shortly after, it announced that its largest projects \u2014 Garden Well and Rosemont \u2014 experienced major flooding in February. As a result, the company (having no cash on hand) was required to materially increase its debt facility to repair, modify and upgrade its assets. <\/p>\n

As such, production has been significantly downgraded this year. <\/p>

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Regis has been targeting production of over 400,000 tonnes of gold per year for 2015. Today, it announced that production should be between 305\u2013355,000 tonnes of gold. <\/p>\n

Its cash costs have also increased significantly. In 2013, they averaged roughly US$562 per gold ounce. Now the company is forecasting its cash costs should rise to between US$835\u2013915 per ounce of gold. <\/p>\n

What now for Regis Resources?<\/h2>\n

I think that this company has been extremely unlucky. It was once one of two gold stocks in the ASX100 \u2014 the other being Newcrest Mining [ASX:NCM]<\/strong>.<\/p>\n

Production should be materially lower this year. Furthermore, following plant and site modifications, all-in sustaining costs (total costs) will likely come in well above the US$1,000 level. This leaves little room for error if the gold price falls. <\/p>\n

As such, investors are hitting the sell trigger. I can\u2019t say that I\u2019m surprised. <\/p>\n

Key catalysts are the company returning to full production. The commencement of Rosemont Stage-2 is also important for the company. Patience is key. <\/p>\n

Jason Stevenson+<\/a>
\n Resources Analyst, Diggers and Drillers<\/em><\/strong><\/p>\n<\/p>\n

Join Money Morning on Google+ <\/u><\/a><\/strong><\/p>\n

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\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au What Happened to the Regis Resources Share Price? Shares of Regis Resources [ASX:RRL] got smashed by 7.31% on Monday, closing at $1.58. This was the lowest price since 7 October 2010. This follows Regis\u2019 25% share price decline last Friday. Why did this happen to the RRL Share Price? Regis Resources is a […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-51761","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/51761","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=51761"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/51761\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=51761"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=51761"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=51761"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}