I'd like to welcome Jim Beyer, Managing Director and CEO, to begin the conference. Jim, over to you.
Thanks, Paulie. Good morning, everyone, and thanks all for being on the call with Regis Resources for our December 2026 half year financial results. I'm joined by our CFO, Anthony Rechichi, our COO, Michael Holmes, and our new Head of Investor Relations, Matthew Collins. Welcome, Matthew. On this call, we'll be referring to various slides that are in the pack that was released earlier this morning, and if you don't have it, the document can be downloaded from our website or the ASX. Pardon me. So now moving through the slides to slide number 3. This is a great slide, and it highlights the continuing step up in financial performance for the half year, underpinned, of course, by the favorable gold price environment.
Running down the list of financial results, we're very pleased with the continued uplift in earnings, in profitability and cash generation, reporting both a record net profit after tax and cash flow for the period. Across our assets, we've seen solid and consistent operational performance, which we expect to continue into the second half of the year. Gold production and all-in sustaining costs for the first half of FY 2026 was in line with expectations. At nearly 187,000 ounces of gold at an all-in sustaining cost of AUD 2,850 per ounce, and that includes a AUD 188 an ounce non-cash charge for stockpile inventory drawdown.
Now, we sold our gold into another period of record spot gold prices, and at the end of December, we finished with AUD 930 million of cash and bullion, after a build of AUD 413 million in just six months. Furthermore, the company is debt-free. Our balance sheet is in a very strong position, and given the cash-generating capability of our assets, it continues to strengthen each day, which positions us well to capitalize on growth opportunities. In line with our strong balance sheet position, the board has formalized a new capital management policy, which we have also released today. The new policy provides a clear structure for returning capital to shareholders, while also prudently allocating capital to existing operations, maintaining a strong balance sheet and funding continued growth.
We expect to pay a fully franked ordinary dividend on a semiannual basis, having regard, of course, to prevailing cash and bullion balances, business cash flows, available franking credits and other capital allocation priorities. Ordinary dividend, or ordinary dividend payments are expected to represent between 25% and 50% of the group cash increase over the preceding half financial year. Now, this has led us to the declaration of AUD 0.15 per share, fully franked dividend for the half, for a total of about AUD 114 million, and we look forward to being able to continue to deliver strong shareholder returns. With that, I'll hand over to Anthony to take us through a bit more of the detail on the half year results.
Thank you, Jim, and good morning, everybody. I'll start by having you all turn to slide number 4, and with that, as well as a very impressive financial performance, as we discussed in the recent quarterly, the half year outcomes show we are very much on track for our full-year guidance numbers. We sold 182,000 ounces of gold into an increasing spot price market, realizing just under AUD 6,000 an ounce over the period, and that underpinned high cash inflows and overall profitability. Those cash flows resulted in AUD 639 million of statutory operating cash flow. Remarkably, we also delivered a AUD 323 million net profit after tax, a record, as Jim mentioned, compared to the AUD 88 million in the first half of FY 2025.
You'll see on the bottom of slide 4 that the change in the net cash and bullion was a whopping 306% increase, remembering that we had AUD 300 million in debt at December 31st, 2024, and we're obviously debt-free now. You'll see some more of the cash build-up in the upcoming slides in this presentation. Now, just turning to slide 5, and that shows the cash and bullion movement during the period. You'll be familiar with this chart from our recent December quarterly report, which is in the format that we've been using for a long time now in our quarterlies. So this chart includes our bullion on hand, which is valued at market price rather than at cost in this instance.
If you have any questions on the difference in the presentation of these cash flows versus our statutory cash flow statement in the half year report, please feel free to ask, and we can point you to the differences in classifications, etc. Now, reading this chart, it's clear to see that our operations generated in excess of AUD 700 million in the half, and we spent AUD 190 million on capital, inclusive of our growth projects, AUD 39 million on exploration and AUD 10 million at McPhillamys. Additionally, AUD 19 million of expenditure was for corporate costs, interest and facility fees. Of course, you can see the AUD 38 million dividend payment we made back in October. Moving on to slide 6 now. You can see a simple yet effective representation of the ability of our assets to generate significant cash.
Over the past six months, the business has generated AUD 413 million of cash and bullion, and look at that, since December 2023, over AUD 1 billion. Importantly, this is not by doing anything extraordinary, it is by being unhedged and by delivering what we said we would do, and doing so in a healthy spot gold price environment. Now, onto our income statement, and that's at slide 7. The layout on this slide shows our income statement in a simple, transparent flow from our sales to our statutory net profit. During the half year, gold sales revenue was up 40% off the back of record spot gold prices. Cost of goods sold was similar to last time round, and finance costs were down now with the extinguished debt.
But you'll see tax expense is up, and you'd expect that off the back of such high pre-tax profits. And that's a reminder for you all that we move back to tax payments in cash from next month. So all said and done, the half year profit after tax is a magnificent AUD 323 million, up 267% on the corresponding half. Now, following on from all of the strong cash flows and profits I've mentioned, naturally, our shareholders' minds turn to dividends and other shareholder returns. The board has responded to this with a new capital management policy, the key elements of which are summarized there on slide 8.
The first immediate result of this new policy is the declaration of a AUD 0.15 per share, fully franked dividend, a significant increase on the AUD 0.05 per share dividend we paid back in October last year. Importantly, we look forward to making franked dividends a regular part of the investment experience in Regis. Thank you, and back to you, Jim.
Thanks, Anthony. Pardon me. Ending the slides with a dividend that's three times larger than the one we paid for the whole of last year is certainly a great spot, and that's just for the first half, a great spot to hand over from. Look, the ability for Regis to pay these dividends in line with our new capital management policy is really a testament to us delivering what we said we would consistently deliver for a bit over two years now, and reaping the rewards of the gold price environment. Now, I'd ask you to move to slide 7, briefly, for no other reason than really just to reiterate. Sorry, to slide 9, to reiterate the guidance for the year. There's nothing special there. We haven't changed it. We're still on track, so nothing new there.
Obviously, the gold price is very beneficial to us, but if you can't consistently deliver the gold ounces from your projects into today's gold price at a reasonable cost, you can't take full advantage of the price environment for shareholders. We've been able to take that advantage, and the proof is in the significant returns we're now able to deliver to shareholders. So if we just move to slide 10, please. In summary, we are unhedged, debt-free, and Regis' consistent operational performance continues to generate cash.
With Regis Resources, the records for the first half include record statutory net profit after tax, record cash flow, and that gave us AUD 930 million net cash and bullion at the end of December 2025, delivering over AUD 1 billion in cash build since December 2023, and there is clear ongoing cash-generating capacity. We reinstated dividends with a new capital management policy, paying that AUD 0.15 a share for a total of AUD 114 million, fully franked, giving just on, or fractionally under, AUD 700 million now totally paid, total payment in fully franked dividend returns since 2013. At the end of the day, there's no need to promise chocolates tomorrow when we're making them today, returning them today, and you can eat them today.
We'll continue to progress our growth strategy while producing profitable ounces. Look, on that note, thanks for listening, and I'll now hand it back to Paulie and open the floor up for questions.
Thank you, Jim. As mentioned, we will now begin the Q&A session. As a reminder, if you are listening by phone and would like to ask a question, please press star, followed by the number one on your telephone keypad to raise your hand and join the queue. To withdraw your question, press the star one again. When called upon to ask your questions, please use your device handset and ensure you are not on mute. Your first question comes from the line of Levi Spry of UBS. Please go ahead.
Morning, Levi.
Good day, Jim, and team. Thanks for your time this day. Great news on your, your dividend policy. I guess, on my mind a little bit is just, you know, the next little while, we don't see material CapEx looming, but what, what is the update on McPhillamys? It's typical to the project that's been left behind through this gold cycle. Lots of optimization to be had. So, yeah, what's the update? Thanks.
Yeah, good question. So in December last year, we were in court. We basically got the two-prong approach to McPhillamys. We are undertaking—we're in court with a judicial review. We feel that there was some missteps in the process and the justice that we were allowed or, you know, the proceedings and the way that the process was run and we're appealing that. That's been heard in court. The judge has reserved his decision. We're not. There is no set timeline on when to expect a response on that, but we'd like to think that that will be by the middle of the year.
If we're successful there, and obviously, we believe we should be, then the new minister and department will go and review and correct those procedural issues, and then we'll see whether makes a new decision. So, you know, that's it takes, obviously, quite some time. Things like that don't happen quickly. So we're working on hoping that that occurs. But what we're also doing at the same time is we've identified an opportunity, and we've still got a lot of test work to do, but we think that there may be an option for what's called integrated waste landform. We basically press the tails, turn it into a cake, and co-mingle it in the waste rock dump.
Now, that is a whole new process and will take quite some time to work our way through the approvals process, assuming that we can get it, of course, which is not certain. Either way, we're anticipating that we wouldn't be in a position to make any FID on McPhillamys until probably early 2028. So while we're spending money on it, and there's a, you know, there's clearly a project there, I think it's gonna cost us about, over the next couple of years, about AUD 60 million maybe to get it to that point. Well, you know, we clearly we'd love to have the mine running at the moment, but that's the timeframe, which is really saying it's at least two years or around about two years before we start spending on it.
So McPhillamys is very significant in our medium-term capital demand, but not in the near term. I think that answers your question. Levi? Hello?
Sorry. Yeah, thanks for the update, Jim. Thanks. Thank you. Appreciate the detail.
Yeah, no worries.
Your next question comes from the line of Alex Barkley of RBC. Your line is open.
Thanks. Good morning, Jim and team. A question on the-
Morning, Alex.
-use of franking credits. Yeah, thanks. Are you able to give the current balance? And when you say it's gonna be a factor going forward, does that mean you want to keep it at 100% fully franked div...? Do you expect that's pretty achievable, even if hypothetically, you get towards the top of that payout ratio? And then as a follow-up, would buybacks ever be part of your capital management strategy? Maybe if the franking isn't there. Thanks.
Yeah, look, I'll let Anthony answer the franking credit one, and then I'll come back to on the buybacks.
Yeah, look, on the franking credits, so, we start paying tax again next month. You know, we've effectively got the catch up there for the FY 2025 period, and then once we make that, we start going back to making the regular installments each month, as you do when you're a tax-paying method. What that does, that's allowed for us, 'cause that's happening in this financial year, it's allowed for us to make these dividend payments, a franked payment in anticipation of those tax payments that we might start making next month. Now, the go-forward plan under the policy is that, from our expectations, we'll continue to pay fully franked dividends, and that's what we've stated in the policy.
So we've mapped that out, and the expectations are so long as we're profitable, we're paying tax, and that gives us the ability to keep paying those fully franked dividends, and the calculation allows for that.
Yeah. Thanks. I think Anthony has mentioned before, there's quite a significant tax payment that's due for back tax for basically, I think, FY 2025 of around AUD 94 million. That immediately gives us franking credits for now. We just have to have those by the end of this financial year. And, you know, the prices and the profit is great, but it also means you got to start paying tax. So that will have an impact on our cash flows going forward, along with everybody else that's making profits. And, I think, you know, in our modeling, we're quite comfortable that the franking, there's plenty of franking credits there. In terms of share buybacks, it's certainly in our policy to be something that's considered.
For now, we've just decided to have that there in our policy, but we made no decision to action anything on that at this moment, but that will continue to be something we'll consider going forward.
Okay, that's very clear. Thanks very much, guys.
Your next question comes from the line of David Coates of Bell Potter Securities. Please go ahead.
Morning, Jim and team. Congratulations on delivering the chockies. Well done. Question on the-
Somebody picked up on that, don't they?
Oh, yeah, I'm listening hard, mate. Just on, if I've done the numbers sort of roughly correctly, well, so the new capital management policy is 25%-50% of, you know, half yearly cash build. I think the distribution just announced is around sort of 27%-28% of that. Without getting too far into the weeds, just interested in some of the factors that have been considered in arriving at that payout ratio?
Yeah, one of the things that you need to, I mean, we do in that calculation, take into account, you know, the cash build, which is probably the way you've done that calculation. The other thing that we also take into account, which is effectively at the moment, a non-cash impact, but it will be very shortly, is the payment of tax. At the moment, we're not paying tax, but we're actually accruing an obligation. Rather than, you know, shoot off really quickly and pay a lot and then find, you know, crikeys, we've got this big tax bill that we forgot to take into account. We actually, we, you know, we're watching what that accrual is, and we're accounting for that.
Because once we get into a regular rhythm of paying tax, as it's, you know, each month, which is where we're heading basically next year, then that becomes a little less, you know, it's easier to account for. But right now, we're just very cognizant of these tax payments that are upcoming, and we just want to make sure that that's factored in. I hope that makes sense.
Yep. Yeah, that makes sense. That makes sense.
Which I think, i f you do the numbers , you'll see that the payout was a bit higher than, as a proportional percentage, it was a bit higher of what was available. Yeah.
No, fair enough. 'Cause I was listening so hard, Jim, also, just on that comment you made on capitalizing on growth opportunities. So, as usual, you know, I'm sure you'll pull out your top, draw your M&A list, but just, but just on, on, on those sort of growth options, you know what? Obviously, you guys got some organic stuff, but I mean, what's the focus, I suppose?
Yeah, it's interesting. I mean, we've The team at site at Duketon is doing some great work on a couple of fronts. We're going back to old areas, and Buckwell was a fantastic example of reworking, rethinking ground that had previously been walked away from, and it's given us a great opportunity there to keep the mill full at Duketon North now for another five years. And I think, you know, giving us something like 30,000 or 40,000 ounces a year over and above what we've been anticipating out of Duketon, 'cause we've always said Duketon should produce 200-250. Buckwell is gonna sit on top of that. So that's great, and the beauty of that is not much capital required relative to other things.
Exploration is certainly an area where we will probably slip, as we have done. You've seen, we've increased a little bit of money into that, and that's off the back of some great work. The team there is giving us some good reasons to put some more money into it. Over at Tropicana, there's things just keep trundling along. I don't think at the moment there's anything significant. There's lots that hasn't already been identified. You know, the undergrounds keep going, the exploration drilling keeps extending. We want to get back out in the field and do some exploration for open pits, which would be great. In terms of, you know, I've already talked about McPhillamys, but that's certainly longer dated.
In terms of growth opportunities sitting in front, we're really, we're the same as everybody. You know, we're looking at, we're looking at options. Really, I mean, yes, we are looking, you know, is it right to use cash, or is it right to use paper, scrip? Is it right to do a bit of both? They're all the things that we, we consider in terms of how we'd fund it. We just haven't got to a point where we've been satisfied that something is beneficial for our shareholders, and we'll just continue looking until we find something that does and it works.
No, fair enough. Great. Thanks, Jim. I really appreciate that.
All right, so.
Your next question comes from the line of Adam Baker of Macquarie. Please go ahead.
Morning, Jim, and Anthony. Thanks for the updated dividend policy. Looks like a nice policy to reward shareholders on the dividend side of things. Just wondering with regards to the, you know, obviously cash, but you also got bullion as well. Is this just bullion on hand? You know, are you also considering gold in circuit here, or are you just drawing the line at bullion on hand and, you know, I'm noticing at the end of December 31st, you had about, AUD 29 million of bullion on hand. Is that kind of the level that you'd normally sit at? Obviously, it’s dependent on gold prices, but, yeah, just any clarity on that.
Yeah, that number moves around from up there. It is just bullion on hand. We don't, for that cash and bullion balance, we don't count the value of stock. And the reason that we're quite comfortable doing that is, by the time the ink's dry on those reports, that bullion's usually sold. You know, it's, there's nothing closer to actual cash than bullion that I know of. So we, when we declare our cash and bullion, and you're looking at those numbers there that I think we put in the report, and we say, how many ounces and what value, they, as I said, they're sold within a day or so. So, but we don't count anything that isn't an actual bullion bar that you can hold.
And we don't hold. We don't do any strategic holding for on the basis of, let's see if the gold price goes up. We just turn it pretty quickly and just push it out the door and send it off to whichever refinery that gold is due to go to.
Yeah, okay, that's, that's clear. Thank you. And just secondly, on McPhillamys, I might have missed it at the start there, but, you know, it sounds like the judge has had a couple of months to sit on this judicial review now. Do you have any indication when the outcome might come about?
Well, the case was heard in mid-December. There is no statutory period. Sort of you talk to, you know, you talk to lawyers and ask two lawyers a question, you get three different answers, but maybe we should delete that. But the guidance was, don't expect anything for at least three months, was sort of what people were intimating. But then all of that occurred, you know, that occurred just before Christmas, and you don't.
You know, people take January off. So if you add 1.5 months-3 months , you know, you got mid-December, mid-January, February, March, April, you know, maybe we'll hear-- we'd like to think that we'll hear something in April or May, but we just don't know. We think it was all pretty clear. We, you know, we believe that it wasn't particularly complicated. It was quite, quite clear what our grievance was and the rationale behind it, but, you know, the law will take the time that it requires.
Yeah, that, that's understandable. And the AUD 60 million you mentioned to kind of get to FID in 2028, can you kind of give a rough breakdown, you know, how much of that is going into the, the drill bit and how much is going into desktop study work?
Look, it's spread across a whole lot of things. Actual field, actual testing. It could be up to that. We've still got to work out exactly what we-- 'cause it's sort of some of it's sequential, but some of it's permitting, some of it's legal fees, you know, ongoing legal fees. Some of it's environmental studies that we have to do again, because unfortunately, the project now has been delayed for so long that some of-- and we've had to modify things, that we've got to go back and do a whole bunch of new heritage reviews. And I tell you what, they are not the cheapest things to do these days.
They are extremely expensive, and they never get simpler, or they take, you know, they used to take days, then they took weeks, now they seem to take months, and they've got to be cross-seasons. So there's costs involved in that. Of course, there's the engineering works as well. So it's quite a gamut spread across the two years.
Okay, thank you. Awesome.
Before we continue on to the next question, a reminder, if you would like to join the queue, to press star one now. And your next question comes from the line of Matthew Frydman of MST Financial. Your line is open.
Sure, t hanks. Morning, Jim and team. Maybe firstly, on the capital management policy, I guess looking at the dividend calculation, unless I've missed something, there's no mention of debt or I guess about, you know, thinking about your changes in your cash position on a net basis. So should we read into that, I guess the intention is to always be debt-free, or, you know, if you did have to draw down on debt for whatever reason, expansionary growth or an acquisition or whatever it may be, do you expect that'll trigger, I guess, a rethinking of this capital management policy? Thanks.
Well, we haven't had to mention debt because we don't have it, but that will be taken into account. But just we don't, we certainly don't take a view that we will only do it if we're ever debt-free. We think, you know, when we look at it, we think, all right, well, at the moment, we don't have massive demands for CapEx. You know, maybe McPhillamys, there's no certainty that we'll make a decision to fund McPhillamys completely out of cash flow. You know, we'd have a pretty lazy balance sheet if we did that.
So, you know, certainly sometime in the future, it would make some sense to have maybe a bit of debt on the balance sheet to fund a project, but still continue to be in a position, you know, the bottom line is, we'd still be in a position to maintain dividends. That's all part of what the board will have to consider. You know, we discussed what would we do in those situations. You know, and there's nothing wrong with debt as long as it's on responsibly, and in fact, it's quite reasonable to think that some companies have got some debt and continue to pay a dividend. That's a responsible business. But it's certainly not wrong—it's certainly right to say that debt will not necessarily stop us from paying dividends.
Okay, got it. Thanks, Jim. Yeah, I guess, I guess it falls under the consideration of, yeah, you know, future capital allocation requirements. Thanks. Maybe moving over to,
Just s ort of add a little bit. The one thing that we've just got to watch is, you know, we certainly don't want to appear that we're going into debt so that we can pay a dividend. You know, that's not what we want to. That's not the message we want to send, but we certainly think that it's having a bit of debt is reasonable on a balance sheet. You can manage it, and you can still maintain a position to pay dividends when you look at the reasonable outlook. So we're quite comfortable with that concept. Just right now, we don't have to worry about it.
Yeah, certainly not an issue at the moment. Maybe changing tack to, I guess, the cost environment and cost pressures you're seeing, obviously pretty healthy cash flows across the industry pretty broadly. So when you think about your, I guess, your mining contractors, your support services, your exploration budget that you've talked to, are there any material pressures that you're seeing as we start off a new calendar year, or I guess, as you think forward to next financial year, you know, what are your levers to control costs in that environment?
And then maybe secondly, if I can, and maybe preempting your answer a little bit from at least from a stripping perspective, y ou know, given the strong margins and the work you're doing across the operations to unlock more profitable answers, how should we expect the stripping profile across the business to change or to pick up? And what sort of impact is that gonna have on your costs at either asset? Thanks, Jim.
Yeah, thanks, Matt. All right. Well, I mean, first off, generally, the cost environment, I think we're seeing across the whole board, generally sort of consistent with CPI. We are seeing hotspots really of availability of some personnel. You know, underground is always, has always been a challenging space and continues to be. It just seems to have gotten a little, you know, things loosened up a little bit when the nickel underground, you know, a couple of years ago, when the nickel guys all shut and operators were out there. That's certainly not the case anymore. We're seeing, yeah, you can always get a bottom on a seat, but what you're looking for is competent and experienced, and that's proving to be challenging.
And it means that things take a little bit longer, or it means you, you might have to push the cost of up a little bit, but generally speaking, we're not seeing any, you know, massive increases than from CPI. In terms of the question of the stripping, I mean, if you talk about what are the big things that impact open pit mining cost per ounce of gold, it's strip ratio and grade. You know, that you can worry about CPI movements of 5%, but if, and, and/or 10% even, but if your strip ratio goes from 2 to 4, then that's pretty scary impact on your cost, right? That's the main thing. So you're on the, on the right track of asking the question.
I think, I mean, we, you know, things that will push it up, for example, up at Buckwell, we're up there now mining waste in preparation, and we've outlined that in the, that's, that doesn't show up in our all-in sustaining costs until we start production. We actually pre, pre-waste mining before commercial production, we treat as great capital. I think the number we put on that was about AUD 40 million or AUD 50 million, it was about AUD 40 million. Other things that we are looking at, you know, we could, there are big cutbacks that we are considering for Garden Well and maybe even Gloster, which are really ex, you know, strip ratios that are, if the gold price was two and a half, you, you could, you wouldn't do it, but you might do it now.
But that work is probably if we're gonna put them in our plans and agree to them, you know, some of them require 18 months or two years worth of pre-strip before you actually get to the answers. So, we're not at a point where we're making decisions on that yet, but, you know, we're probably, we certainly are evaluating all of those options at the moment. But if the gold price stays where it is, we certainly would be stupid not to, or crazy not to be considering those, particularly if we've got spare mill capacity somewhere out in the future and it's there to be used.
One of the things that we have done, actually, to sort of push our unit costs down, our contractor, MACA, have just, we've got a 3,600 digger on site, a big digger, which is allowing us to actually move larger volumes at, you know, maybe 30% on a unit cost basis less than we were before. But, we've factored all of those into our guidance. But yeah, there are some. We've got options to take more cutbacks. We're also chasing options that might help reduce the unit costs to offset some of that. But I think the big thing we need to consider with those big cutbacks and the big strip ratio numbers, you know, they make pretty good financial sense at AUD 6,000-AUD 7,000 an ounce.
Ideally, what I'd love to do is, you know, maybe have a plan to do that, but keep encouraging and keep the good work coming from our exploration team, who are finding more near surface better grade stuff. So we're chasing both of those options at the moment.
Yeah, got it. Thanks. Makes a lot of sense. Thanks for the commentary, Jim. Maybe just quickly, you mentioned Buckwell. Can you remind me, and you probably said this previously, but when do you expect Buckwell is gonna move into commercial production? Thanks.
Next... When did it enter? Next, next year. Like next, later next year.
Next calendar year?
Yeah.
Got it. Thank you.
This does conclude today's Q&A session. I'll turn the call back over to Jim for closing remarks.
All right. Thanks, Paulie. Thanks, everybody. Good questions, we appreciate that. Thanks, everyone, for joining us. As always, if there's some things, I think as Anthony mentioned, some nuances of the accounts that you need some explanations for or need, please feel free to give us a call, get in touch with Matt, share your details, and, thanks very much for joining. Have a good day.
This does conclude today's conference call. Thank you all for joining us. You may now disconnect.