Monsters of Rock: Regis ‘not giving up’ on McPhillamys; lithium stocks wane in market meltdown

• Regis “not giving up” on McPhillamys as court date looms
• Miners cop a whack as markets melt
• Lithium stocks give up week’s gains

As gold prices float at record levels, Regis Resources (ASX:RRL) chair James Mactier says the miner is ‘not giving up’ on its McPhillamys project in NSW a year on from a Federal Government ruling that all but killed it in its current form.

The ~2Moz deposit was taken out of reserve after a controversial s10 ATSIHP Act ruling from former Environment Minister Tanya Plibersek, which ruled Regis would not be able to build on the site for the project’s waste dump.

While the ruling allowed for the development of the gold mine in principle, Regis declared it was unable to build the project economically in another configuration.

Given its high capital cost – a DFS last year put a $996 million bill on the development of a mine that would take 6.1 years to pay back – the decision not to proceed was of little concern to analysts covering the stock.

But gold prices have since surged more than 50% in Aussie dollar terms to over $6300/oz – roughly double the values used in the study – making projects like McPhillamys more attractive.

A judicial review is ongoing, with Mactier telling investors at Regis’ AGM today the company had not given up on the asset.

“One of the most significant events of the last financial year, was of course, the Federal Minister for Environment and Water’s declaration over part of our approved McPhillamys Gold Project under Section 10 of the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth),” Mactier said.

“Regis has commenced proceedings in the Federal Court as to the validity of the Minister’s decision, and this is scheduled to be heard early next month. In the meantime, we continue to investigate alternative project configurations, and whilst initial studies appear favourable, there is no certainty of a viable alternative being realised.

“That said, the project is so significant in its potential that we are not giving up and will continue to invest time and a relatively modest amount of expenditure to see it through to development.”

Debt free

Regis remains debt free and unhedged, hitting that milestone for the first time in FY25, with a $5.3bn market cap and $675m in the bank after reporting a record NPAT of $254m in FY25.

It plans to produce 350-380,000oz at AISC of $2610-2990/oz in FY26 between its 100% owned Duketon operations near Laverton and 30% share in the Tropicana gold mine, run by AngloGold Ashanti.

Mactier flagged continued strong returns to shareholders after paying out a fully franked 5c per share at the end of FY25.

Though its growing cash pile makes Regis one of a number of gold companies viewed as potential acquirers heading into 2026.

Gold was muted overnight as data began to flow from the US Government following the end of a long shutdown.

ANZ Research economists said despite a surprise to the upside on non-farm payrolls, the highest unrounded unemployment rate in America since August 2017 (pandemic aside) saw bets on a December rate cut lift from 28% to 40%.

They reckon conditions justify easing, which is good for gold and commodities. Fed members remain apprehensive though.

“Gold pushed lower as doubt increases over the Fed’s next move on interest rates,” ANZ’s Mahjabeen Zaman, Brian Martin and Daniel Hynes said.

“US jobs growth topped expectations in September, but the employment rate continued to rise. This underscores the lingering fragility of the labour market. Officials also remain divided over whether the slowdown in the labour market justifies another rate cut.

“After the jobs report, Chicago Fed President Goolsbee signalled he’s still apprehensive about delivering another rate cut at the central bank’s December meeting.”

Gold stocks were hammered across the board on Friday, with the sub-index dropping 4.3% with Westgold Resources (ASX:WGX) also hosting its AGM in Perth.

Impacting the broader market, BHP (ASX:BHP) stock sank 2.9% amid reports a second product it sells to China in small volumes had been barred from sales directed by the China Mineral Resources Group.

The Big Australian has not provided ASX disclosures, despite widespread market interest in reports of strained negotiations with CMRG over the past two months.

Lithium stocks trip

A wave of euphoria has engulfed lithium stans this week, powered by news that energy storage demand was fuelling higher prices for both spodumene and chemicals.

Liontown Resources (ASX:LTR) and Mineral Resources (ASX:MIN) both delivered positive updates on pricing, with Barrenjoey and Canaccord among the forecasters projecting much higher prices in the next two years.

It comes after a lithium winter which saw prices tumbled from late 2022 levels of over US$8000/t for 6% Li2O spodumene concentrate, the product made in Australia, to under US$600/t in June.

We’re now back above US$1000/t and as high as US$1250/t if spot sales from LTR and MIN are to be relied on.

Overseas Chilean giant SQM, which owns shares in two large assets in WA, saw its net profit climb from US$131.4m a year earlier to US$178.4m in Q3, its strongest performance in two years.

The miner said it expected lithium demand to be up 25% in the wash up this year, hitting 1.5Mt LCE for the first time.

But after a week of strong gains, Friday gave way to profit taking.

Pilbara Minerals (ASX:PLS) slid 7.5% to $3.88, Elevra Lithium (ASX:ELV) dropped close to 11% as the Canadian spod miner held its first AGM as a merged entity and Liontown slid 8.1%, giving up its gains from the goodwill after the MetalsHub auction on Thursday.

Brokers are bullish though, with Canaccord’s Reg Spencer calling Argentine brine play Galan Lithium (ASX:GLN) the ‘next cab off the rank’ in the South American country in a note today.

Commissioning of its Hombre Muerto West brine project is scheduled for H1 2026, with Spencer calling it the world’s most advanced development project.

“HMW is funded to deliver Stage 1 production of 4ktpa LCE (in LiCl) at AISC of ~US$3500/t LCE. Pond construction is complete with over 9.5kt of brine inventory ready for filtration, de-risking project ramp up, in our view. Authium, GLN’s offtake, funding and technology partner, has completed all major structural work of the nano-filtration plant with site preparation underway,” he said in a note.

Canaccord’s 30c price target and spec buy label is predicated on a ‘heavily risked’ NPV of stage 1 production. Only delivery and visibility on a 21,000tpa stage 2 development is there upside, Spencer said.

But the broker believes lithium pricing has potential to overshoot and has forecast a peak chemical price of US$22,500/t in 2027, also noting that brine projects are popular takeover targets when markets are running hot.

“The brine sector has undergone significant consolidation over the last 5 years, with our research suggesting 28 major acquisitions in the last cycle with activity concentrated in the “lithium triangle”,” Spencer wrote.

“Majors have shown a preference for brine projects given they are long life, bottom quartile cost operations, albeit carrying typically higher capital costs.”

The ASX 300 Metals and Mining index fell 5.48% over the past week.

Which ASX 300 Resources stocks have impressed and depressed?

Making gains 

PMET Resources (ASX:PMT) (lithium) +19.1%

Pilbara Minerals (ASX:PLS) (lithium) +3.3%

Liontown Resources (ASX:LTR) (lithium) +1.7%

Lynas (ASX:LYC) (rare earths) +1.4%

Eating losses 

IperionX (ASX:IPX) (titanium) -20.2%

Alkane Resources (ASX:ALK) (gold) -18%

Vulcan Energy Resources (ASX:VUL) (lithium) -16.5%

Southern Cross Gold (ASX:SX2) (gold) -16.3%

IperionX tumbled after a short selling activist issued a report on the US-focused titanium processing stock, which prompted a response from the company on Monday.

A rough Friday saw materials stocks smashed across the board, with even this week’s hot lithium stocks giving up most of their gains.