14/04/2009 - 09:43

Regis green lights $125m WA gold project

14/04/2009 - 09:43

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Perth-based Regis Resources has given the go ahead for the development of its Duketon gold project in Western Australia with capital costs expected to peak at $125 million.

Perth-based Regis Resources has given the go ahead for the development of its Duketon gold project in Western Australia with capital costs expected to peak at $125 million.

The decision follows the receipt of the bankable feasibility study two weeks ago, which studied the viability of an 111,000 ounce per annum operation over a period of five years.

Initial gold production, to start after the 17-month construction schedule, will be 145,000 ounces for the first year.

Cash costs for the first year are $A345 per ounce.

Capital costs have been estimated at $125.3 million however Regis said there remained "scope to refine this capital cost downward through the detailed engineering phase".

The study, prepared by GR Engineering, used an average gold price of $A1,067 per ounce.

Regis said it is currently in discussions with potential financiers for project.

Meantime, Regis chief executive David Walker has lashed out at a group of dissident shareholders who have been at the forefront of a push to oust the gold miner's board of directors.

In March, a group of renegade shareholders holding a total of 10.7 per cent of Regis shares called on all board members to resign.

They used their numbers to force an extraordinary meeting on May 4 that will vote on whether to remove existing directors and elect representatives of the dissident group to the board instead.

Members of the so called Associated Group of shareholders include former chairman of gold explorer Equigold, Nick Giorgetta, and former Equigold executives Mark Clark and Morgan Hart.

The Associated Group says they are unhappy with the performance of the board and have "significant reservations" about their ability to successfully operate and run the Duketon gold project.

They have said that since Mr Walker became Regis chief executive, the company has significantly underperformed the sharemarket's All Ordinaries Index, the ASX Gold Index and gold price.

Mr Walker on Tuesday verbally attacked the Associated Group after announcing that the company's $125 million Duketon gold project in WA would go ahead.

"The Associated Group are not long-term shareholders in this company ... they are in our view opportunistic purchasers," Mr Walker said.

He said the group had made misleading statements and was not making plain its intentions for Regis.

"The board of Regis feels at this point that the non-disclosure of the Associated group is a very real risk for existing shareholders," Mr Walker said.

"Nick Giorgetta has a very good name in the gold industry in Australia and overseas and that reputation is well deserved," Mr Walker said.

"This show is really being run by Mr Clark and Mr Hart. I would make the point to you that they do not enjoy Nick Giorgetta's strong reputation and in fact it seems to us that they are getting a bit of a lend of Nick's well-regarded reputation," he said.

In reply, Mr Clark said Mr Giorgetta would have a significant role if their team was voted on to the Regis board.

"I guess Mr Walker can say whatever he wants, but we are more than happy to stand by our achievements at Equigold," Mr Clark said.

 

 

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