On September 12, 2017, most of the gold miners traded low owing to the continued slip in gold prices. This has come after the recent rise seen at the back of global uncertainty. With this background, below are two ASX stocks that plunged quite a bit.

Regis Resources Limited

RRL Details

Robust pre-feasibility economics at the McPhillamys Gold Project: Regis Resources Limited (ASX: RRL) came under pressure owing to gold price movement and stock trading ex-dividend on September 12, 2017. RRL has recently announced the estimation of a maiden Ore Reserve at the Company’s 100% owned McPhillamys Gold Project (MGP) in NSW. Regis has undertaken studies to a pre-feasibility level into the development of the MGP, including construction and operation of 7.0 Mtpa open pit gold mine with the process facility and supporting infrastructure. The study has been prepared in conjunction with Cube Consultants Pty Ltd (Cube) and Mintrex Pty Ltd (Mintrex). The study assesses the technical and financial viability of the project to a Pre-Feasibility Study level and supports the estimation of a JORC compliant maiden Ore Reserve. The work will continue towards completion of a Definitive Feasibility Study (DFS) in the December 2017 quarter. Maiden Ore Reserve Estimate at the McPhillamys Gold Project (MGP) has been estimated at 60.1 million tonnes at 1.05g/t Au for 2,034,000 ounces of gold. A gold price of A$1,400 per ounce was used in Ore Reserve pit optimisation.


Mine physical results from the study; (Source: Company reports)

Average gold production is estimated at approximately 192,000 ounces per annum over a mine life of 9 years for a total of 1.73 million ounces recovered. Gold production is lowest, at 143,000 ounces, in the first year of operations and peaks, at 224,000 ounces, in year eight as the grade profile increases with depth. Over the past six months, the stock has moved up by 31.3% (as at September 11, 2017) and is trading at high levels. We maintain an “Expensive” recommendation on the stock at the current market price of $ 3.96

Saracen Mineral Holdings Limited

SAR Details

Improved Financials: For FY17, Saracen Mineral Holdings Limited’s (ASX: SAR) revenue surged 53% yoy to A$423.1m (2016: A$276.5m), led by 45% increase in gold production to 272,807 oz (2016: 188,656 oz). In turn, SAR reported 54% yoy growth in EBITDA at A$113.4 million and 10% yoy growth in NPAT at A$28.4 million. Importantly, the group aims to achieve all-in sustaining cost (AISC) of A$950/oz in FY20 compared to AISC of A$1,381 for FY17 resulting from substantial investment in organic growth. The company holds cash and bullion of $45.2 million, up from A$40.3 million a year earlier, with no debt and after spending A$138.9 million during the period on project development and exploration.

Mining at the King of the Hills and Red October underground mines ceased during FY2017, with production ramp-ups at both Karari and Deep South providing increased replacement mill feed. The underground portal at Karari’s sister mine, Whirling Dervish, was cut late in the year, with exploration drilling platforms to be established in FY2018. During the year, approximately A$15.7 million of gold sales were made from gold recovered from development activities at the King of the Hills underground mine. However, this amount was offset against the project’s capital development costs and is not accounted for as sales revenue. We maintain a “Buy” recommendation on the stock at the current price of $ 1.34

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