Ground Breakers: Wall slip nightmare sends Regis tumbling and FMG buys F1 battery play
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Regis Resources (ASX:RRL) has been absolutely savaged after lopping 40,000oz off its guidance after a wall slip at its Rosemont open pit.
The terrible news compounded a weak trading day for gold miners, with Regis’ stock slipping by over 14%.
The gold miner had been tipped for a big reversal of fortunes in 2022, having been one of the most notable large cap laggards over the last year.
That will be harder now, with the company saying “other operational challenges” mean it will not be able to make up the loss of high grade feed.
Its Duketon operations near Laverton will now produce 300,000-340,000oz down from 340,000-380,000oz with all in sustaining costs to rise from $1340-1410/oz to $1425-1500/oz.
Although there has been no change to its Tropicana mine, Regis says company guidance will fall from 460,000-510,000oz at $1290-1365/oz to 420,000-475,000oz at $1425-1500/oz.
The wall slip came in the late winter of Rosemont’s life after heavy rain on January 16. The mine would have delivered another 18,500oz at 2.6g/t, but can only be replaced with low grade stockpiles.
The ounces may be recovered later from the Rosemont underground development, but the lower production in FY22 will see higher costs, along with higher prices for consumables and contract labour for mill maintenance.
Regis produced 108,281oz at $1530/oz including 74,829oz at $1728/oz in the December quarter at Duketon, while its 30% share of AngloGold’s large Tropicana mine contributed 33,453oz at $1002/oz.
It was not all doom and gloom in the gold sector this morning.
West African Resources (ASX:WAF) has cleared the debt from its Sanbrado mine after producing another record quarter in Burkina Faso of 87,324oz at US$721/oz. The company outstripped the upper level of its 280,000oz guidance for 2021 with 288,719oz at US$796/oz.
Fellow West African goldie Tietto Minerals (ASX:TIE) was up ~7% after pulling out some truly exceptional gold hits.
It struck 25.4m at 131.1g/t at its Abujar gold project in Cote D’Ivoire, including a 1.1m intercept at 2853g/t.
Formula 1 has garnered unprecedented popularity in the past year after a Netflix docu-series saw Americans scrap their boring NASCAR in favour of the sophisticated Europeans of Ferrari, McLaren and … er … Red Bull.
Andrew Forrest’s Fortescue Metals Group (ASX:FMG) must have been watching as well, because it is setting F1 engineers on the task of decarbonising its iron ore mines after paying US$223 million for Williams Advance Engineering.
The battery and electrification innovator is owned by private equity firm EMK Capital and Williams Grand Prix Engineering and has already been working with FMG’s green energy division Fortescue Future Industries to design and build a battery system to power an electric haul truck.
Its first major project will be a “world leading battery electric train”.
“This is a major milestone in the future of our Company as we welcome WAE to the Fortescue family. FFI and WAE will work together to decarbonise Fortescue – and in turn the global heavy industry and hard to abate sectors – for the good of our planet, and the benefit of our shareholders,” Forrest said.
“Today’s announcement builds on our commitment to remove fossil fuel powered machinery from our operations and to replace it with zero carbon emission technology, powered by FFI green electricity, green hydrogen and green ammonia.”
FMG said Williams will continue to service its existing customers in automotive and motorsports industries, where it raked in US$84 million in revenue in 2021.
“High performance battery and electrification systems are at the core of what we do at WAE and this acquisition and investment will facilitate the company’s further growth to support the delivery of zero emission products and services across existing sectors – such as automotive, motorsport and off-highway – and new sectors too,” WAE CEO Craig Wilson said.
“This will benefit all of our stakeholders along with current and future customers who are very important to us. My thanks also to EMK Capital for their support during the past two years that has enabled us to accelerate the successful progress of WAE and development of technologies to help tackle climate change.”
BHP spinoff South32 (ASX:S32) has posted uplifts in aluminium, nickel and zinc production as it prepares for its pivot into battery metals over the next year.
The diversified miner increased alumina production by 4% in the December quarter to 1.33Mt and kept aluminium production relatively steady at 246,000t, down 1%, with its biggest slides in met coal (down 24% to 1.19Mt after a longwall move at its Illawarra operations) and manganese ore production (down 17% to 1.3Mt.)
Nickel output was up 11% to 10,700t, part of a big 26% year on year increase in first half production to 20,300t, while zinc output rose 12% to 17,300t and lead and silver slipped 8% and 11% respectively to 3.22Moz and 28,300t.
It comes ahead of one of the most transformative years in the company’s short history.
It plans to become a copper producer for the first time by settling the US$1.55 billion deal for a 45% stake in the Sierra Gorda copper mine in Chile, and expects to grow its aluminium production by 24% to 1.2Mt in FY23 after increasing its interest in the Mozal aluminium smelter and the restart of its 40% owner Alumar smelter in Brazil.