Golden opportunity on horizon for Regis Resources

Regis Resources could be ripe for merger and acquisition activity as share prices in the goldmining industry rise. Picture: Tessa Mapstone/South Burnett Times

The $2.6bn Regis Resources is being closely watched by those interested in the gold space, with many suspecting it could be next out of the blocks when it comes to making a major acquisition.

The gold mining sector is considered ripe for merger and acquisition activity as share prices in the industry continue their ascent, and so far it has seen a number of high-profile deals, including Evolution buying Red Lake for $700m last year, and Saracen and Northern Star acquiring the Super Pit for more than $US1.5bn ($2.2bn). Now the thinking is that Regis is next.

Possible targets could be the $553m Capricorn Metals, run by former Regis boss Mark Clark.

Another option is a merger with the $1.4bn Australian listed Gold Road Resources, given that its joint venture partner on the Gruyere goldmine, Gold Fields, has a similar deposit to Regis.

Another option is an acquisition in North America, although COVID-19 restrictions could create challenges with embarking on such a move.

However, it is worth noting that its chief executive, Jim Beyer, who previously ran Mt Gibson until 2018, is considered to take a conservative approach on the M&A front.

Regis has projects in Western Australia and NSW and much of the expectation as to whether it takes part in corporate activity is expected to rest on the future of its McPhillamys Project in NSW, with organic growth being the focus of late.

The company has been going through the NSW permit hurdles and should delays continue, M&A activity could be inevitable to support growth, given production will fall off in five years if the company’s organic growth does not come off.