Gold miner Regis Resources has taken a hit on the ASX after it announced significantly lower production forecasts on the back of flooding at two of its mines.
Gold miner Regis Resources has taken a hit on the ASX after it announced significantly lower production forecasts on the back of flooding at two of its mines in February.
Regis has forecast a full-year gold production range for the 2015 financial year of between 305,000 ounces and 355,000oz.
The company predicted in an investor presentation at its annual general meeting last year that it would achieve production of about 430,000oz in the 2015 financial year.
Regis produced 34,000oz of gold across its three mines in the first seven weeks of the June quarter, compared with 71,000oz in the full December 2013 quarter.
The Perth-based company's Duketon project, located 140 kilometres from Laverton, received about 165mm of rain over three days in February, which caused extensive flooding at areas of the Garden Well and Rosemount mines.
Regis said at the time that it would be forced to suspend full operations at the mines for at least three months as it completed remedial works.
The company said today that it was on track to recommence mining at Garden Well at the end of June but had been restricted to waste removal at Rosemont.
Pumping equipment has been removed from the site but the company is still removing sludge and sediment at Garden Well, which has a thickness of up to one metre.
Regis managing director Mark Clark said while it was a tough time for Regis, he believed the setbacks would be solved in the near term.
“Regis is well placed both financially and operationally to manage its way through the interim operations period and get the entire Duketon gold project back to a strong steady state in the second half of this calendar year,” he said.
The company has extended its debt facility with Macquarie Bank from a limit of $20 million to $70 million.
Regis shares fell heavily on the ASX, closing 25 per cent lower at $1.71.
