Regis Resources Ltd (ASX:RRL) is down over 8% in the early trading hours today, after plunging 27% the previous week. The mining company has been plagued with falling commodities prices for some time now. Demand from China has been cooling off significantly which has dug deep into commodity prices. Australian mining companies have been particularly vulnerable due to their reliance on Asia growth for sales. But commodity prices aren’t the only problem faced by Regis Resources. They announced that their Duketon operations were experiencing more difficulties. Last year some of their operations were inhibited by rainfall and flooding. Now they have announced that their operations in Moolart Well, Rosemont and Garden Well have yet to fully recover. Garden Well is projected to come in below guidance. However, the other two operations are expected to come in below previous record production numbers.
On a positive note, Regis Resources has announced that they will remain on current projections and match their previous production guidance. “Despite lower than expected production in the March 2015 quarter, the company remains on track to deliver within the lower end of the group’s 2015 gold production guidance of 305,000 to 355,000 ounces”, claimed managing director Mark Clark. Regis Resources has also announced that is has negotiated a debt reconstruction with Macquaire Group which will allow them to begin paying a dividend again. Some minor positive news has not been enough to lend confidence to investors. RRL is trading around 1.275, down about 8.9% in the opening hours of the trading day.
Author: Simon Herrmann
Mar 09, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.