Equity Analysis /
Australia

AU : Regis Resources - Acquires long life Tropicana

    Mat Collings
    Mat Collings

    Research Analyst

    CGS-CIMB
    13 April 2021
    Published by

    Regis have announced agreement to purchase a 30% interest in the Tropicana gold mine for A$903m. The transaction remains subject to a pre-emptive right by the majority owner of Tropicana, who has 60 days to determine whether to exercise its right. A$903m appears to fully value Tropicana but the transaction is transformational for Regis long term outlook plus an immediate production and cash flow lift. It will take time for RRL to demonstrate the upside it sees in the project and the market to digest. We maintain our ADD recommendation and revise our target price to A$4.01/share for Regis, applying high level assumptions on the production and cost profile of Tropicana and the funding metrics announced today.