Australian Gold Miner Regis Expects Fiscal Year Loss Amid Writedowns

   By Rhiannon Hoyle 
 

SYDNEY--Mining company Regis Resources Ltd. (RRL.AU) expects to record an annual loss after a slide in gold prices and writedowns against its Australian operations and projects of up to 280 million Australian dollars (US$263 million).

Perth-based Regis said Wednesday it expects to report a profit of A$79 million for the year through June 30, 2014, down from a A$201 million profit a year earlier. However, the company said the estimate doesn't include tax or an estimated impairment charge of A$230 million-A$280 million against its assets.

Regis is reviewing the value of its sites after gold prices declined to their lowest level in three years on expectations the U.S. Federal Reserve would cut back on easy-money policies installed to steady the U.S. economy. The U.S. central bank's bond-purchase program helped drive the precious metal to record highs in recent years, as investors bought gold as an alternative investment.

The company anticipates releasing final results of the asset review when it posts it annual financial report in September.

Regis isn't the only gold miner facing weaker earnings and hefty writedowns. A week ago, Newcrest Mining Ltd.'s (NCM.AU) new chief executive warned of a potential impairment charge of as much as A$2.5 billion as it reviews the value of its own operations.

Regis said the bulk of its writedowns was expected to be linked to its Garden Well and Rosemont mines in Western Australia.

The company also shelved its McPhillamys gold project in Australia's New South Wales state, citing a more-than 20% decline in gold prices since it acquired the deposit from Newmont Mining Corp. (NEM) and Alkane Resources Ltd. (ALK.AU) in 2012.

Write to Rhiannon Hoyle at [e-mail]

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