Regis Resources’ (ASX: RRL) McPhillamys gold project in New South Wales, Australia, has lost almost all of its value due to the unexpected, but damaging environmental protection declaration issued last week by the federal government.
Environment Minister Tanya Plibersek’s “Section 10” ruling, intended to preserve Indigenous heritage grounds, meant that Regis cannot be built the mine’s tailings dam at the planned location.
The gold miner revealed on Wednesday the financial hit of Plibersek’s decision, booking a non-cash impairment of A$192 million ($130m) against a significant portion of the carrying value of the proposed mine.
Regis Resources also withdrew McPhillamys’ definite feasibility study, scrapping the 1.89 million ounce ore reserve previously reported for the asset. This official estimate is central to how investors value mining companies.
The company, the third largest Australian gold producer listed on the local exchange (ASX), noted that choosing a new site would effectively restart the approvals process. This, it said, would potentially delay the project by up to a decade, making it unviable in its current form.
“To advance any form of realistic and approvable alternative tailings solution requires further extensive investigations and studies along with the restart of the state and federal approvals processes. This could take between five and 10 years, with no certainty of a viable alternative being realized.”
Regis said the Indigenous group the company believes to have the clearest legal authority to assess the heritage value of the site, the Orange Local Aboriginal Land Council, have not opposed the project. In a submission to planning authorities last year, the group said the mine wouldn’t put any important heritage sites or artifacts at risk, adding that any potential impacts could be “appropriately managed and mitigated”.
The Western Australia-based company said more details on the situation will be unveiled in its full year 2024 financial results, to be published on Thursday.
