• Regis Resources shares charge after news of aborted Twiggy bid for 15% of the gold miner
  • Price offered was a reported 13.8% premium to Regis’ previous share price
  • Mount Gibson finally hitting straps at Koolan Island

Andrew Forrest is a bonafide influencer when it comes to public markets, and news the iron ore kajillionaire wants to buy in is normally good for a short term bump.

Even when he fails apparently.

That’s because a reported raid by Twiggy of Fortescue (ASX:FMG) and now green energy spruikin’ fame of Regis Resources (ASX:RRL) shares is off.

But given he was asking $1.48 for a 15% stake from existing shareholders, 13.8% above market price, current investors are feeling a little better about the value of their investment.

It would have topped up Wyloo’s existing 4.9% stake, taking it to 19.9% ownership.

According to the AFR, Forrest’s mining investment vehicle Wyloo was after the full 15% or nada and didn’t want to settle for 12%.

Regis shares were up 11.2% to $1.44 at 12pm AEST.


Adopting dogs

If anyone is unaware, $1.1 billion capped Regis is the owner of the Duketon gold project near Laverton, a collection of open pits and underground mines famed for turning good profits at relatively low gold grades, an oft-quoted exception against the conventional wisdom that grade is king.

It also paid $900 million for IGO’s (ASX:IGO) 30% stake in the Tropicana gold mine, one of Australia’s largest, in 2021.

Great asset, though the cost and many investors’ wandering eyes away from gold and towards battery metals exposure has seen the market give it low marks for the acquisition to date.

Regis expects to produce 420,000-475,000oz of gold at an all in sustaining cost of $1,425-1500/oz this financial year and generated underlying profit after tax of $44 million in the first half.

Still it broke a long dividend paying streak in February by dumping its half year payout.

Forrest’s bid for Regis suggests investors are betting on a bottom for the stock, which has been one of the worst performers in the ASX 200 over the past couple of years.

That has seen some analysts turn brighter on the stock as an example of a company whose value belies its operating record and history as a dividend payer.

RBC for instance has a $3 price target and outperform rating on Regis, though it has persistently shed value since the rating was slapped on by the investment bank in December last year.


Regis Resources (ASX:RRL) share price today:


Mount Gibson ramps up production at Koolan Island

If there was an award for lucklessness, Mount Gibson Iron (ASX:MGX) may be a contender.

MGX owns what is by all accounts a very good asset. Its Koolan Island mine is one of a handful of DSO iron ore operations that can produce ore in the vicinity of the 65% premium index, prices well above the 62% benchmark and normally reserved for Brazilian producers.

But as prices surged to records of US$230/t last year, MGX was doing pre-strip.

Its low grade Shine mine in the Mid-West shut down not long after entering production as prices fell badly in the second half of the year.

Prices are a little healthier for iron ore now and Koolan Island is finally hitting its straps.

Ore sales trebled in the June quarter, MGX said, rising to 700,000t.

Of the four shipments that left port just one was at a lower 63% Fe grade, with three other shipments averaging 65%.

Now that it’s back into the good stuff at Koolan, MGX will be hoping China’s economy keeps current iron ore prices afloat after a precipitous drop in recent weeks.

Singapore futures were down 2.75% to US$115.70/t this morning, although MGX’s product should command a premium on top of that spot price.

All up MGX sold 1.65Mt in FY22, including 1.35Mwmt from Koolan and 0.3Mwmt from Shine. It fell two shipments short of its 1.5Mwmt target at Koolan after delays due to ground support work and Covid absenteeism.


Mount Gibson Iron (ASX:MGX) share price today: