Shareholders in gold producer Regis Resources are set to begin reaping rewards from the company’s progress with it announcing intentions to pay a maiden dividend next year.
At the company’s annual general meeting held this morning managing director Mark Clark said Regis expected to pay off all its debts by Christmas, and be in a position to pay its first fully franked dividend to shareholders at the end of the current financial year.
“We’re now the 78th largest company on the ASX; we’re not the biggest company going around but given where we have come from three years ago it’s been an amazing journey,” Mr Clark told shareholders.
Mr Clark said it planned to pay back its $30 million debt with Macquarie Bank by Christmas and would then be open to paying dividends.
Regis is swiftly moving towards annual production of 400,000 ounces following the commissioning of its second major project – Garden Well – in the past month.
First gold pour was achieved from the project near Laverton in early September, and will reach total annual production of around 220,000 ounces by next financial year – adding to the existing 105,000 ounces produced from the nearby Moolart Well project.
The company is also planning to begin construction of its Rosemont deposit, in the same area, in March with first production expected in the September quarter.
That is likely to see the company’s annual production top 400,000 ounces in the 2013-14 financial year.
Mr Clark also credited the acquisition of the McPhillamy’s gold project in New South Wales as a milestone putting Regis on a steady path for mid-term growth.
The acquisition - which gives current joint venture owners Newmont Exploration and Alkane Resources Regis shares to the value of $150 million – was passed by shareholders.
“We think this is a really good opportunity for the company,” Mr Clark said.
“The first thing we need to do is drill the deposit out…on the basis of that work we should be in a position to make a maiden reserve about this time next year.”
Construction of the project was planned for 2015 with an estimated capital cost of around $120 million – to be funded out of the company’s existing cash flow.
Regis’ strong financial position and ability to fund the $109 million capex for Garden Well with existing cash flows helped push its three year-averaged total shareholder return up to 101 per cent.
The company’s share price has appreciated 63 per cent in the past year to around $5.40 a share.
