Regis Resources Limited (RRL) Earnings Call Transcript & Summary

Hello, everyone. My name is James Mactier, Chairman of Regis Resources, and I welcome you all virtually to our 2020 Annual General Meeting. The agenda for today will be as follows. First, we will have a formal welcome and attend to meeting administration. I'll then give the Chairman's address, which will be followed by the formal resolutions of the meeting, where voting will take place online. Questions can be submitted during the formal resolutions, and there will be an opportunity to ask the questions related to the resolutions prior to the closing of the poll. After the close of the formal meeting, there will then be a presentation from our Managing Director, Mr. Jim Beyer, covering our operational and financial performance. Questions related to Jim's presentation can be submitted anytime during the presentation, and Mr. Beyer will answer questions at the end. I'd like to start by acknowledging the traditional custodians of the land on which we are hosting this meeting, the Whadjuk People of the Noongar nation. I also acknowledge the traditional custodians of the various lands on which our meeting participants are based and the Aboriginal and Torres Strait Islander people participating in this meeting. We pay our respect to their elders, past, present, and emerging. We have elected to hold a virtual Annual General Meeting in response to the health risk and travel restrictions arising from COVID-19 pandemic. It remains to be seen where the future Annual General Meetings will be conducted in this format or whether we revert to physical attendance or a hybrid version. This in part will be a function of your feedback, health advice and legislation. I'd now like to introduce my fellow Directors: Managing Director and CEO, Mr. Jim Beyer, Non-Executive Directors, Mrs. Fiona Morgan; Mr. Steve Scudamore; Mrs. Lynda Burnett; and Mr. Russell Barwick as well as Company Secretary and Chief Financial Officer, Mr. Jon Latto; and Assistant Company Secretary, Ms. Elena Macrides. We're also joined today by representatives of our auditors, KPMG, Mr. Derek Meates and Mr. Michael Bohn; Mr. Christian Owen from our legal advisers, Corrs Chambers Westgarth; and Mr. Rod Somes from our share registry, Computershare. Each of our directors have joined the online webcast, and I will advise the meeting that there is a quorum of shareholders present online. Therefore, the meeting is properly constituted, and I declare the meeting open. The Notice of Meeting dated October 23, 2020, has been provided to all registered shareholders in accordance with COVID-19 guidelines on the company's website, and I, therefore, take the notice as read. I'm pleased to report on another excellent year for your company. An increased gold price and consistent operational performance resulted in a record net profit after tax of $200 million. Regis continued to be a leader in the gold industry in the fundamental business metrics of profitability per ounce of production, earnings per share, dividend yield and return on equity. At the same time, we utilized our strong operational cash flows to invest in future production growth through capital and exploration expenditure and reduced our hedge book, whilst maintaining a strong cash balance and debt free status. Our strong financial position and outlook enabled the Board to declare fully franked dividends of $0.16 per share for the year, totaling $81 million. Total dividend declared by Regis now amounts to $488 million. To give shareholders the opportunity to reinvest dividends at a discount to market and without brokerage costs, we implemented a dividend reinvestment plan. Approximately 16% of dividends were paid in shares under the plan this year. During the year, we welcomed Ms. Lynda Burnett and Mr. Russell Barwick to the Board as independent, nonexecutive directors. Their skills and experience complement those of the rest of the Board and their appointments have enabled us to enhance our Board committee structure. Executive appointments during the year included Mr. Jon Latto as Chief Financial Officer; and Mr. Stuart Gula as Chief Operating Officer, and we welcome them also. Operationally, a significant milestone was achieved this year with the declaration of commercial production from the Rosemont underground mine. We're also investigating the feasibility of an underground mine at Garden Well and on results thus far, we expect a development decision in the near future. We have also significantly increased our landholding in the Duketon Greenstone Belt as well as our budgeted exploration expenditure and are excited about the potential for further discovery. With our 3 operating mills in the region, discoveries can be very quickly and cheaply commissioned and monetized. With a planned 2 million ounce, single open pit operation, our 100% owned McPhillamys deposit in New South Wales is one of the largest undeveloped gold deposits in Australia. The definitive feasibility study is in the final stages of completion and the regulatory approval process well-advanced. On the basis of our studies, submissions and feedback received to date, we are looking for a favorable outcome in the first half of 2021 and to be in a position to commence development shortly thereafter. This development would provide very significant employment, training, procurement, infrastructure and fiscal benefits to the local and regional communities as well as royalties and taxes for the State and Federal governments and significant returns to shareholders, whilst being carried out in an environmentally and socially responsible manner. With an excellent team, a robust debt-free balance sheet, strong operating cash flows, 7.7 million ounces of resources, including 3.6 million ounces in reserves, and an enviable internal growth path in established Australian mining districts, we are confident of a long and exciting future. We remain committed to creating value for our people, our communities and our shareholders through mining safely and responsibly. Finally, on behalf of the Board, I'd like to thank Jim Beyer, his senior management team and all our staff, contractors and families for their efforts, dedication and understanding over the year, a year that was significantly disrupted by the COVID-19 pandemic. The entire team performed admirably during the pandemic with excellent planning, flexibility, communication and cooperation. We remain vigilant and prepared for any further disruption, but look forward to another safe and profitable year. We will now move to the formal business of the meeting. For this meeting, we propose to table each resolution and then answer any shareholder questions submitted on those resolutions at the end of the formal meeting before voting is finalized. Voting on all resolutions is now open and will remain open until questions relating to the resolutions have been answered. If shareholders require help, I refer you to the online meeting guide link that was provided in the Notice of Meeting and the letter to the shareholders sent on 23rd of October. If you have any questions about the online voting system or want information during the meeting, you can also call Computershare on +613-9415-4024. For this meeting, all resolutions will be decided by a poll. Mr. Rod Somes from Computershare is online and will act as returning officer for the poll. If you're entitled to vote, the polling icon will soon appear as provided in the slide. Please submit your votes at any time. There is no need to hit a Submit or Enter button as the vote is automatically recorded. You have the ability to change your vote up until the time I declare voting closed at the end of the formal part of the meeting. Proxies have been received. The total number of valid proxies and the manner in which the proxies are to vote will be displayed before each resolution is considered and voted upon. Where a proxy vote has been given to the Chairman without voting instructions, in all cases, the Chairman intends to vote in favor of the resolution. Questions on any of the resolutions can be submitted by shareholders at any time prior to close. To ask a question, press on the speech bubble icon as indicated on the slide. This will open a new screen. At the bottom of that screen, there is a section for you to type and submit your question. Our Assistant Company Secretary will manage questions to remove any duplication. The first item of business of the meeting, which is to receive and consider the financial report, the directors' report and auditor's report for the year ended June 30, 2020. These reports are all included in the company's annual report and are also available on the company's website. Derek Meates and Michael Bohn from the company's auditors, KPMG, are here today online and are able to answer questions on the audit if needed. If you have a question on this item and have not yet submitted it before the meeting or using the -- and not already submitted it before the meeting or using a chat box, please tap on the question icon on your screen and type your question in the chat box below. We now progress to each of the resolutions to be before shareholders. Resolution 1, adoption of Remuneration Report. We will now move to consider the first resolution, which is the adoption of the company's Remuneration Report. The Corporations Act requires that at the Annual General Meeting, a resolution that the Remuneration Report is adopted be put to a vote of shareholders. The Remuneration Report details the company's policy on the remuneration of directors and senior executives. This vote is advisory only and does not bind the company or directors. For the purpose of today's Annual General Meeting, I ask the shareholders to consider and, if thought fit, to pass the following resolution as an ordinary resolution: that, for the purpose of Section 250R(2) of the Corporations Act and for all other purposes, approval is given by the shareholders for the adoption of the Remuneration Report as contained in the annual report. I note the proxy votes that have been received and are shown on the slide. I now move the adoption of the company's Remuneration Report. If you have a question on this item, please tap on the question icon on your screen and type your question in the chat box now. We will respond to questions on this resolution at the end of the formal part of the meeting. If you'd like to vote on this item now, please select the polling icon and cast your vote. We will now move to consider the second resolution, which relates to the election of Mrs. Lynda Burnett. Mrs. Burnett was appointed by the Board since the last Annual General Meeting and is now required to stand for election before shareholders. The Board, in the absence of Mrs. Burnett, unanimously supports her election. I now ask shareholders to consider and, if thought fit, to pass the following resolution as an ordinary resolution: that, for the purpose of Article 16.4 of the Constitution and for all other purposes, Lynda Burnett, a Director who was appointed on November 27, 2019, retires, and being eligible, is re-elected as a Director. I note the proxy votes that have been received and are shown on the slide. I move the election of Mrs. Burnett as a Director of the company. If you have a question on this item, please tap on the question icon on your screen and type your question in the chat box now. We will respond to questions on this resolution at the end of the formal part of the meeting. If you'd like to vote on this item now, please select the poling icon and cast your vote. We'll now move to consider the third resolution, which relates to the election of Mr. Russell Barwick. Mr. Barwick was appointed by the Board since the last Annual General Meeting and is now required to stand for election before shareholders. The Board, in the absence of Mr. Barwick, unanimously supports his election. I now ask the shareholders to consider and, if thought fit, to pass the following resolution as an ordinary resolution: that, for the purpose of Article 17.1 of the Constitution and for all other purposes, Russell Barwick, a Director who retires by rotation, and being eligible, is re-elected as a Director. I note the proxy votes that have been received and are shown on the slide. I move the election of Mr. Barwick as a Director of the company. If you have any questions on this item, please tap on the question icon on your screen and type your question in the chat box below. We will respond to questions on this resolution at the end of the formal part of the meeting. If you'd like to vote on this item now, please select the polling icon and cast your vote. Resolution 4 is the re-election of myself as a Director. As this fourth resolution relates to my re-election as a Director, I will now stand down as Chairman of this meeting for the purpose of this resolution and ask that my fellow Director, Steve Scudamore, take on the role of Chair for this resolution.

Thank you, James. We will now move to consider the fourth resolution, which relates to the re-election of James Mactier. Mr. Mactier is due to retire from office, and being eligible, presents himself for re-election. The Board, in the absence of Mr. Mactier, unanimously supports his re-election. I now ask the shareholders to consider and, if thought fit, to pass the following resolution as an ordinary resolution: that, for the purpose of Article 17.1 of the Constitution and for all other purposes, James Mactier, a Director who retires by rotation, and being eligible, is re-elected as a Director. I note the proxy votes that have been received and are shown on the slide. I move the re-election of Mr. Mactier as a Director of the company. If you have a question on this item, please tap on the question icon on your screen and type your question in the chat box now. We will respond to questions on this resolution at the end of the formal part of the meeting. If you like to vote on this item, now please select the polling icon and cast your vote. I will now hand back the role of Chair to Mr. Mactier.

Thank you, Steve. Resolution 5, the grant of long-term incentive Performance Rights to Jim Beyer. We will now move to consider the fifth resolution, which relates to the approval of 154,353 long-term Performance Rights to Jim Beyer as detailed in the Notice of Meeting. The Performance Rights proposed to be issued to Mr. Beyer represents a long-term incentive component of Mr. Beyer's remuneration package and the Performance Rights will only vest if he achieves his respective threshold and target levels of performance during the performance period. The Board, in the absence of Beyer, unanimously supports the award of the long-term Performance Rights. Please note there is a voting exclusion on this resolution as detailed in the Notice of Meeting. I ask the shareholders to consider and, if thought fit, to pass the following resolution as an ordinary resolution: that, for the purposes of Listing Rule 10.14, Sections 200B and 200E of the Corporations Act and for all other purposes, shareholders approve the grant of 154,353 Performance Rights, the number of which are capable of converting to shares will be determined at a predetermined vesting date and subject to the level of satisfaction of performance conditions and Board discretion, to Jim Beyer, Managing Director of the company or his nominee under the executive incentive plan on the terms and conditions set out in the Explanatory Statement. I note the proxy votes that have been received and are shown on the slide. I move the award of the long-term Performance Rights to Mr. Beyer in accordance with the resolution detailed in the Notice of Meeting. If you have a question on this item, please tap on the question icon on your screen and type your question in the chat box now. We will respond to questions on this resolution at the end of the formal part of the meeting. If you'd like to vote on this item now, please select the polling icon and cast your vote. Resolution 6, the grant of short-term incentive Performance Rights to Jim Beyer. We will now move to consider the sixth resolution, which relates to the approval of 37,816 short-term Performance Rights to Jim Beyer as detailed in the Notice of Meeting. The Performance Rights proposed to be issued to Mr. Beyer represent 50% of the short-term incentive component of Mr. Beyer's remuneration package. The other 50% is paid in cash. These short-term incentive rights will vest on July 1, 2021, if Mr. Beyer is still an employee of the company at that time. The Board, in the absence of Mr. Beyer, unanimously supports the award of the short-term incentive Performance Rights. Please note there is a voting exclusion on this resolution as detailed in the Notice of Meeting. I ask the shareholders to consider and, if thought fit, to pass the following resolution as an ordinary resolution: that, for the purposes of Listing Rule 10.14, Sections 200B and 200E of the Corporations Act and for all other purposes, shareholders approve the grant of 37,816 Short-Term Incentive Performance Rights to Jim Beyer, Managing Director of the company or his nominee under the Executive Incentive Plan on the terms and conditions set out in the Explanatory Statement. I note the proxy votes that have been received and are shown on the slide. I move the award of the short-term Performance Rights to Mr. Beyer in accordance with the resolution detailed in the Notice of Meeting. If you have any questions on this item, please tap on the question icon on your screen and type your question in the chat box now. We'll respond to questions on this resolution at the end of the formal part of the meeting. If you'd like to vote on this item now, please select the polling icon and cast your vote. We will now consider the seventh resolution, which is a special resolution and relates to the adoption of a new constitution. The company adopted its current constitution in 2011. Since then, there have been a number of changes to the Australian corporations law and best practices. In light of this, the directors propose that the current constitution be modernized to ensure compliance with current laws and otherwise reflect what is now considered current best practices. The Board unanimously supports this resolution. I ask the shareholders to consider and, if thought fit, to pass the following resolution as a special resolution: that, for the purposes of Section 136(2) of the Corporations Act and all other purposes, the existing constitution be repealed and replaced with a new constitution in the form tabled at the Annual General Meeting and signed by the Chairman for identification purposes with effect from the close of the Annual General Meeting. I note the proxy votes that have been received and are shown on the slide. I move the new constitution be adopted. If you have a question on this item, please tap on the question icon on your screen and type your question in the chat box now. We'll respond to questions on this resolution at the end of the formal part of the meeting. If you'd like to vote on this item now, please select the polling icon and cast your vote. We'll now move to consider the final resolution for today, which is a special resolution for the inclusion of proportional takeover provisions in the constitution. If passed, the resolution will insert provisions in the new constitution that enable the company to prohibit the registration of transfer of shares resulting from a proportional or partial takeover unless shareholders approve the offer. The provision gives all shareholders a say in whether or not to allow a proportional takeover, and we believe it is in the best interest of shareholders and the company. I ask the shareholders to consider and, if thought fit, to pass the following resolution as a special resolution: that, conditional on Resolution 7 being passed and with effect from the close of the Annual General Meeting, the proportional takeover provisions set out in Annexure B to the Explanatory Statement be inserted into the new constitution tabled at the Annual General Meeting and signed by the Chair for the purposes of identification. I note the proxy votes that have been received and are shown on the slide. I now move to adopt -- I now move the adoption of the proportional takeover provisions. If you have a question on this item, please tap on the question icon on your screen and type your question in the chat box now. If you'd like to vote on this item now, please select the polling icon and cast your vote. Having now moved each of the resolutions, can I please ask our Assistant Company Secretary to read out any questions received regarding the financial account or any of the resolutions.

Thanks, James. We've got a question directed to one of our directors, Mr. Russell Barwick. The 2020 annual report shows that you hold no shares in the company and, in fact, the only director not to do so. I appreciate that you were appointed in March 2020, but why do you have no skin in the game? If the situation has changed post June 30, please inform the meeting and your holdings. Mr. Russell Barwick?

Thanks, Elena. Frankly, it's been quite a busy year through this COVID environment and being the only non-WA Director with Regis. As such, I've not got around to buying any stock at this point in time, but I intend to do so. I should add that, amongst other things, I've been particularly focused on assisting the rapidly growing Regis on governance by chairing the new Risk, Safety, Environment and Community Committee of the Board. And I think with some of the work that surrounds the company's future is very, very bright. Thank you.

Thanks. And I might just add. James Mactier, again, as the Chairman. We encourage our directors to hold shares in the company, but I know that Russell has only recently joined. But can I please assure everyone that Russell's work has been -- and his advice has been terrific since he joined. He's very thorough, very diligent and always has the best interest of shareholders in his mind when he's advising on -- making -- helping make recommendations to the Board through his role as Chair of the risk, sustainability, environment community facility and his role as a director. So I have no hesitation to say that he certainly has skin in the game. He doesn't yet own any shares, but over time he may well do so. Any other questions, Elena?

We've had a question from a shareholder. I would like to meet the people that I'm voting for. So I was wondering if we could have the directors introduce themselves.

Yes. I think, obviously, it's difficult without a physical meeting, but in this virtual meeting sense, maybe I could ask Lynda and Russell just to give a quick background.

Thanks, John. I'm Lynda Burnett. As said before, I'm a geologist and I've been in the mining game for about 34 years with mining and greenfields exploration experience. And I guess my key area of expertise is in strategy and growth around mineral resources. I've got 20 years experience around Board, both exec and non-exec, and I've got a -- I'm a graduate of the Australian Institute of Company Directors over 20 years as well.

Thanks, Lynda. Russell?

Thanks, James. Just very quickly, I'm a mining engineer. I've been in the industry for over 45 years, worked for various companies in all sorts of commodities, a lot of it overseas as well as Australia. A lot of my time has been spent in the gold sector, so I've come full circle with the Regis directorship. I was, amongst other things, shareholders would recognize, I was the CEO of Newcrest back in the early 2000s and one of the founding executives that grew Goldcorp from a very small company to what it was until the recent takeover. But I'm hoping that my expertise, in particular, will assist Regis because it is a fast-growing company. We've got a wonderful project in New South Wales we hope to see to fruition. And I'm sure there's a lot more potential in the Duketon area. Thank you.