REGIS RESOURCES LIMITED — Annual Report 2018

Aug 27, 2018

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28 August 2018

ABN 28 009 174 761

www.regisresources.com

Manager Announcements Company Announcements Office Australian Securities Exchange Limited Level 4, 20 Bridge Street Sydney NSW 2000

Level 1 1 Alvan Street Subiaco WA 6008 Australia

PO Box 862 Subiaco WA 6904 Australia P 08 9442 2200 F 08 9442 2290

REGIS DELIVERS RECORD PROFIT AFTER TAX OF $174.2 MILLION FOR FY2018

Regis Resources Limited reports its results for the financial year ended 30 June 2018.

Summary of financial results:

	2018 ($’000)	2017 ($’000)	Change ($’000)	Change %
Gold revenue 604,425 542,218 +62,207 +11% Profit before tax 248,921 196,137 +52,784 +27% Profit after tax 174,231 138,163 +36,068 +26% Basic earnings per share (cents) 34.60 27.59 +7.01 +25% Gold production (ounces) 361,373 324,353 +37,020 +11% Gold sales (ounces) 362,790 319,407 +43,383 +14% Sale price ($/oz) 1,676 1,691 -14 -1% Dividend declared (cents per share) 16 15 +1 +7%

• The record profit before tax of $248.9 million was a $53 million (27%) increase on 2017. This was largely the result of an 11% increase in gold production to 361,373 ounces (FY2017: 324,353 ounces) and continuing cost control at the Duketon operation.

• The record profit after tax of $174.2 million was up $36.0m (26%) on the 2017 result. Earnings per share also increased by 25% to 34.60 cents per share.

• EBITDA[*] increased from $253.3 million in FY2017 to $312.5 million in FY2018 representing a very robust EBITDA margin of 51.5% (FY2017: 46.6%).

The Board of Directors have declared the following fully franked final dividend:

o	Dividend amount	8 cents per share fully franked
o	Ex-dividend date	12 September 2018
o	Record date	13 September 2018
o	Payable date	26 September 2018

The full year dividend of 16 cents per share represents a payout ratio of 25.8% of EBITDA[*] and 13.4% of revenue.

• EBITDA is an adjusted measure of earnings before interest, taxes, depreciation and amortisation. EBITDA is non-IFRS financial information and is not subject to audit. The measure is included to assist investors to better understand the performance of the business

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Operations

Operating results for the Duketon Project for 2018 were as follows:

	2018	2017
Ore mined (Mbcm )	4.58	4.56
Waste mined (Mbcm)	20.13	25.55
Stripping ratio (w:o)	4.40	5.60
Ore mined (Mtonnes)	10.55	10.85
Ore milled (Mtonnes)	10.04	9.78
Head grade (g/t)	1.19	1.11
Recovery (%)	94	93
Gold production (koz)	361	324
Cash cost (A$/oz)	721	790
Cash cost inc royalty (A$/oz)	794	864
All in Sustaining Cost (A$/oz)1	901	945

1 AISC calculated on a per ounce of production basis

• Record gold production at Duketon of 361,373 ounces for FY2018 at a pre-royalty cash cost of $721 per ounce and an all-in sustaining cost of $901 per ounce, both of which were well below the lower end of annual guidance. This has been a result of increased throughput and higher grade ore from the Gloster and Erlistoun satellite pits.

• Pre-stripping has commenced at the Tooheys Well, Dogbolter and Anchor satellite pits.

• Group Ore Reserves as at 31 March 2018 increased by 86% to 4.06 million ounces, largely due to the Maiden Ore Reserve of 2.03 million ounces for the McPhillamys project.

Cashflow

• Cash and gold bullion holdings (including bullion on hand classified as inventory) increased to $208.8 million[*] as at 30 June 2018 (30 June 2017: $151.7 million), an increase of $57.1 million after the payment of $80.7 million in dividends and $33 million in exploration expenditure which included extensive reserve definition drilling at Rosemont Underground.

• Cash flows from operating activities was very strong at $259.7 million, up 26% from the previous year ($206.1 million) due to increased production and lower operating costs.

Regis Managing Director, Mr Mark Clark commented:

“Once again the strong financial performance reflected in these results demonstrates the quality of the Duketon operations and the team that manage them. Record gold production at Duketon of 361,373 ounces returned record earnings of $174 million, up 26% from 2017. These strong results and the cash flow generation underpin the payment of a full year fully franked dividend of 16 cents per share. It was pleasing that the successful exploration effort in 2018 culminated in the decision by the Regis board to approve the development of the Rosemont Underground project. This continues the organic growth initiative at Duketon that has delivered year on year production growth over the last three years.”

• includes bullion on hand classified as inventory and valued at the delivered gold price subsequent to 30 June 2018 (i.e. 3,838 ounces at $1,700/oz)

Appendix 4E (Listing Rule 4.3A) Preliminary Final Report

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Regis Resources Limited and its Controlled Entities

For the year ended 30 June 2018

(Previous corresponding period is the year ended 30 June 2017)

Results for Announcement to the Market

Resultsfor Announcement to the Market
	30 June 2018	30 June 2017	Change
	$’000	$’000	$’000	%
Revenue from ordinary activities Profit from ordinary activities after tax attributable to members Net profit for the period attributable to members	606,495 174,231 174,231	543,799 138,163 138,163	62,696 36,068 36,068	12% 26% 26%

Dividend Information

Dividend	Amountper security	Franking	Date Paid/Payable
Interim Dividend	8 cents per share	100% franked	21 March 2018
Final Dividend	8 cents per share	100% franked	26 September 2018

The financial effect of the current reporting period final dividend has not been brought to account in the financial statements for the period ended 30 June 2018 and will be recognised in subsequent financial reports.

Net Tangible Assets

Net Tangible Assets
	30 June 2018	30 June 2017
	$	$
Net tangible assets per share Earnings per Share	0.61	0.52
	cents	cents
Basic earnings per share	34.60	27.59
Diluted earnings per share	34.35	27.29

Control Gained or Lost over Entities during the Period

The Company incorporated Greenflow Pty Ltd during the financial year, the details of which are included on Page 60 in the attached financial report. There have been no other gains or losses of control over entities in the period ended 30 June 2018.

Additional Appendix 4E disclosure requirements under ASX Listing Rule 4.3A can be found in the Directors’ Report to the financial statements, which is attached, at the following page reference:

Review of results (Directors’ Report)	Page 3
Statement of comprehensive income	Page 26
Balance sheet	Page 27
Statement of changes in equity	Page 28
Statement of cash flows	Page 29
Notes to the financial statements	Page 30
Segment information	Page 33
Earnings per share	Page 37
Independent audit report	Page 66

This report is based on the consolidated financial statements for the year ended 30 June 2018, which has been audited by KPMG.

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ABN 28 009 174 761

and its Controlled Entities

Financial Report for the Year Ended

30 June 2018

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CONTENTS
Corporate Information	2
Directors’ Report	3
Remuneration Report (audited)	12
Auditor’s Independence Declaration	25
Consolidated Statement of Comprehensive Income	26
Consolidated Balance Sheet	27
Consolidated Statement of Changes in Equity	28
Consolidated Statement of Cash Flows	29
Notes to the Financial Statements	30
Directors’ Declaration	65
Independent Auditor’s Report	66

1

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CORPORATE INFORMATION

ABN

28 009 174 761

Directors

Mark Clark (Executive Chairman) Paul Thomas (Executive Director) Mark Okeby (Deputy Chairman/Lead Independent Non-Executive Director) Ross Kestel (Independent Non-Executive Director) James Mactier (Independent Non-Executive Director) Fiona Morgan (Independent Non-Executive Director)

Company Secretary

Kim Massey

Registered Office & Principal Place of Business Level 1 1 Alvan Street SUBIACO WA 6008

Share Register

Computershare Investor Services Pty Limited GPO Box D182 PERTH WA 6840

Regis Resources Limited shares are listed on the Australian Securities Exchange (ASX). Code: RRL.

Bankers

Macquarie Bank Limited Level 4, Bishops See 235 St Georges Terrace PERTH WA 6000

Auditors

KPMG 235 St Georges Terrace PERTH WA 6000

2

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DIRECTORS’ REPORT

Your directors submit their report for the year ended 30 June 2018.

Directors

The directors of the Company in office since 1 July 2017 and up to the date of this report are:

Mr Mark Clark, B.Bus CA

(Executive Chairman)

Mr Clark has over 27 years of experience in corporate advisory and public company management. He was appointed to the board of Regis Resources Limited in May 2009 in the role of Managing Director. Mr Clark assumed the role of Executive Chairman at Regis immediately after the company’s AGM on 12 November 2015. Prior to joining Regis, Mr Clark was the Managing Director of Equigold NL.

He joined Equigold in 1995, was a director from April 2003 and was Managing Director from December 2005 until Equigold’s merger with Lihir Gold Limited in June 2008.

During the past three years, Mr Clark has not served as a director of any other ASX listed companies.

Mr Clark is a member of the Institute of Chartered Accountants in Australia.

Mr Paul Thomas, BAppSc (extmet) GAICD

(Executive Director)

Mr Thomas joined Regis in March 2014 in the role of Chief Operating Officer (COO) and was appointed to the board immediately following the company’s AGM on 12 November 2015. Mr Thomas is a qualified metallurgist with extensive operating and development experience gained in a career of over 30 years in the mining industry. During this time, he has held a number of senior operations management and executive roles within Australian listed gold and base metal mining companies.

Mr Thomas has various regulatory and technical qualifications in mining, processing, management and finance including a Diploma in Open Cut and Underground Mining, a Diploma of Business and a Graduate Diploma of Applied Finance and Investment. He is a Graduate Member of the Australian Institute of Company Directors.

During the past three years, Mr Thomas has not served as a director of any other ASX listed companies.

Mr Mark Okeby, LLM

(Deputy Chairman/Lead Independent Non-Executive Director)

Mr Okeby has considerable experience in the resources industry as a solicitor and as a director of listed companies. He has been an executive and non-executive director of a number of gold producers and other resource companies and has been involved in the development of a number of resource projects and with mergers and acquisitions in the resource sector.

Mr Okeby was appointed Deputy Chairman/Lead Independent Director immediately after the company’s AGM on 12 November 2015 and assumes the responsibilities of Chairman in the event of the unavailability of Mr Clark at any time or in relation to any matter in which Mr Clark may be conflicted.

Mr Okeby is currently a non-executive director of Red Hill Iron Limited and, during the past three years, has not served as a director of any other ASX listed companies.

Mr Ross Kestel, B.Bus, CA, MAICD

(Independent Non-Executive Director)

Mr Kestel is a Chartered Accountant and was a director of a mid-tier accounting practice for over 26 years and has a strong corporate and finance background. He has acted as a director and company secretary of a number of public companies involved in mineral exploration, mining, mine services, property development, manufacturing and technology industries.

During the past three years he has also served as a non-executive director of Beadell Resources Limited (from February 2012 to November 2015).

Mr Kestel is a member of the Australian Institute of Company Directors.

3

Directors’ Report (continued)

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Mr James Mactier, BAgrEc(Hons), GradDipAppFin, GAICD

(Independent Non-Executive Director)

Mr Mactier was joint head of the Metals and Energy Capital Division of Macquarie Bank Limited for fifteen years until his retirement in April 2015. He has wide ranging experience in project and corporate finance, resource project assessment, equity investing, commodity and currency hedging and trading in the metals and energy sectors globally. He is a Graduate Member of the Australian Institute of Company Directors.

During the past three years, Mr Mactier has not served as a director of any other ASX listed company.

Mrs Fiona Morgan, CPEng, BE(Hons), FIEAust, FAusIMM, GAICD

(Independent Non-Executive Director)

Mrs Morgan is a Chartered Professional Engineer with over 24 years’ experience in the mining industry, including working on gold, nickel, coal and iron ore projects. Mrs Morgan is the Managing Director and Chief Executive Officer of Mintrex Pty Ltd, a highly regarded and longstanding consulting engineering company which has successfully undertaken a broad suite of technical services to Australian and international clients developing resource projects. She has a wide range of experience in operations and project management, maintenance, research and design of both underground and surface mining infrastructure.

Mrs Morgan is a Fellow of the Institution of Engineers Australian, a Fellow of the Australasian Institute of Mining and Metallurgy and a graduate member of the Australian Institute of Company Directors.

During the past three years, Mrs Morgan has not served as a director of any other ASX listed company.

Company Secretary

Mr Kim Massey, B.Com, CA

Mr Massey is a Chartered Accountant with significant experience in financial management and corporate advisory services, particularly in the resources sector, as a corporate advisor and company secretary for a number of ASX and AIM listed companies.

Dividends

After the balance sheet date the following dividends were proposed by the directors:

	Cents	Total
	per share	amount
Final dividends recommended: Ordinary shares	8.00	$’000 40,389

The financial effect of these dividends has not been brought to account in the consolidated financial statements for the year ended 30 June 2018 and will be recognised in subsequent financial reports.

4

Directors’ Report (continued)

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Nature of Operations and Principal Activities

The principal activities of Regis Resources Limited (“Regis” or the “Company”) and its controlled entities (collectively, the “Group”) during the year were:

• production of gold from the Duketon Gold Project;

• exploration, evaluation and development of gold projects in the Eastern Goldfields of Western Australia; and

• exploration and evaluation of the McPhillamys Gold Project in New South Wales.

Apart from the above, or as noted elsewhere in this report, no significant changes in the state of affairs of the Company occurred during the financial year.

Objectives

The Group’s objectives are to:

• continue to optimise mining and processing operations across the Duketon Gold Project whilst maintaining a high standard of safety;

• Maximise cash flow by this process of optimisation and the blending of ore feed from satellite resources across the Duketon tenure;

• Organically increase the Reserve base of the Group by discovering and developing satellite resource positions, extending the reserve base of existing operating deposits;

• Focus on regional exploration to add incremental ounces and mine life to the three operating mills in the district;

• Advance the economic study of the McPhillamys Gold Project in NSW with a view to developing a significant long life gold mine at the project;

• Return value to shareholders through a commitment to dividends; and

• Actively pursue inorganic growth opportunities.

Operating and Financial Review

Overview of the Group

Regis is a leading Australian gold producer, with its head office in Perth, Western Australia. The Company operates within two distinct project areas at the Duketon Gold Project in the Eastern Goldfields of Western Australia. The Duketon North Operations (DNO) comprises the Moolart Well Gold Mine, the Gloster Gold Mine, Anchor Gold Mine and the Dogbolter Gold Mine. The Duketon South Operations (DSO) contains the Garden Well Gold Mine, the Rosemont Gold Mine, the Erlistoun Gold Mine and the Tooheys Well Gold Mine.

The Group also owns the McPhillamys Gold Project, an advanced exploration project in New South Wales, 250 kilometres west of Sydney near the town of Bathurst.

Financial Summary
	2018	2017	Change	Change
Keyfinancial data	$’000	$’000	$’000	%
Financial results Sales revenue Cost of sales (excluding D&A)(i) Other income Corporate, admin and other costs EBITDA(i) Depreciation and amortisation (D&A) Profit before tax(i) Income tax expense Reported profit after tax Other financial information Cash flow from operating activities Net cash Net assets Basic earnings per share (cents per share)	604,425 (279,273) 3,396 (15,987) 312,561 (64,437) 248,921 (74,690) 174,231 259,727 180,276 636,842 34.60	542,218 (278,374) 4,962 (15,504) 253,302 (57,581) 196,137 (57,974) 138,163 206,082 117,081 538,392 27.59	62,207 (899) (1,566) (483) 59,259 (6,856) 52,784 (16,716) 36,068 53,645 63,195 98,441 7.01	11.5% 0.3% (31.6%) 3.1% 23.4% 11.9% 26.9% 28.8% 26.1% 26.0% 54.0% 18.3% 25.4%

(i) EBITDA is an adjusted measure of earnings before interest, taxes, depreciation and amortisation. Cost of sales (excluding D&A) and EBITDA are non-IFRS financial information and are not subject to audit. These measures are included to assist investors to better understand the performance of the business

5

Directors’ Report (continued)

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Performance relative to the previous financial year

Regis achieved a record after tax profit of $174.2 million for the full year to 30 June 2018, which was up 26.1% from the previous corresponding year result of $138.2 million. Record gold production of 361,373 ounces for the year and the Company’s commitment to maximising operational efficiencies and controlling costs are the key drivers in the current year result.

Sales

The Company produced 361,373 ounces of gold for the year ended 30 June 2018. Gold sales revenue rose by 11.5% from the previous year with 359,750 ounces of gold sold at an average price of $1,680 per ounce in 2018 (2017: 322,355 ounces at $1,682 per ounce). The Company delivered gold produced into a combination of forward contracts and at the prevailing spot price. The total hedging position at the end of the year was 388,711 ounces of forward contracts with an average delivery price of $1,555 per ounce (2017: 396,406 ounces of forward contracts with a weighted average forward price of $1,551 per ounce).

Cost of Sales

Costs of sales including royalties, but before depreciation and amortisation increased marginally by 0.3% to $279.3 million.

Depreciation and Amortisation

Depreciation and amortisation charges increased by 11.9% from the prior year as the Company’s assets mature and depreciation and amortisation rates based on the units of production method increase as reserves are depleted.

Cash Flow from Operating Activities

Cash flow from operating activities was $259.7 million, up 26% on the prior year due to increased production. During the year, the Company paid $36.9 million of income taxes.

The Company continued to provide strong returns to shareholders through the payment of two fully franked dividends in 2018 totalling $80.7 million.

Duketon North Operations (“DNO”)

Operating results for the 12 months to 30 June 2018 were as follows:

		30 June 2018	30 June 2017
Ore mined Waste mined Strip ratio Ore mined Ore milled Head grade Recovery Gold production Cash cost per ounce – pre royalties Cash cost per ounce – incl. royalties All-in Sustaining Cost (“AISC”)	BCM BCM w:o Tonnes Tonnes g/t % Ounces A$/oz A$/oz A$/oz	1,721,414 5,074,235 2.9 3,154,597 3,255,901 1.09 94 106,928 $649 $718 $827	1,742,903 7,768,536 4.5 3,368,392 2,950,400 1.14 94 100,875 $621 $697 $785

DNO produced 106,928 ounces of gold for the year at an all-in sustaining cost of $827 per ounce. Gold production was up 6% on the prior year as a result of increased throughput at the Moolart Well processing facility and higher grade ore from a full year of production from the Gloster satellite pit. Throughput was up 10% from last year due to processing softer ore from the Gloster deposit.

In May 2018, mining commenced at the Anchor and Dogbolter satellite pits, with first ore expected to be trucked and hauled to the Moolart Well plant in mid 2019.

6

Directors’ Report (continued)

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Duketon South Operations (“DSO”)

Operating results at the Duketon South Operations for the 12 months to 30 June 2018 were as follows:

		30 June 2018	30 June 2017
Ore mined Waste mined Strip ratio Ore mined Ore milled Head grade Recovery Gold production Cash cost per ounce – pre royalties Cash cost per ounce – incl. royalties All-in Sustaining Cost (“AISC”)	BCM BCM w:o Tonnes Tonnes g/t % Ounces A$/oz A$/oz A$/oz	2,857,329 15,060,386 5.3 7,400,488 6,783,488 1.24 94 254,445 $751 $826 $932	2,817,291 17,783,273 6.3 7,481,128 6,830,460 1.10 93 223,478 $867 $940 $1,017

Production at DSO increased by 14% from the previous year with 254,445 ounces of gold produced at an all-in sustaining cost of $932 per ounce which was 8% lower than last year. Production is higher due to a full 12 months of mining of higher grade and softer ore from the Erlistoun gold deposit which contributed to a higher grade ore feed.

Pre-Strip mining commenced at the Tooheys Well satellite pit in January 2018, with first gold production expected to be in the December 2018 quarter.

Exploration

During the year, a total of 253,077 metres of exploration drilling was completed across the Group’s tenements in Western Australia and New South Wales. The table below breaks down the drilling activity (in metres) by Prospect:

	Prospect		Aircore		RC		Diamond		Total			Prospect		Aircore		RC		Diamond		Total
	Rosemont		-		40,408		9,486		49,894			Discovery Ridge		-		3,912		1,255		5,167
	Moolart Well		2,461		22,622		-		25,083			Tooheys Well		1,301		1,638		284		3,223
	Baneygo		4,833		13,790		-		18,623			Erlistoun		-		2,876		-		2,876
	Garden Well		-		18,306		174		18,480			Little Well		2,296		-		-		2,296
	Beamish		-		16,834		-		16,834			Dogbolter		792		1,923		-		2,715
	McPhillamys		-		6,865		5,366		12,231			Idaho		-		2,585		-		2,585
	King John		4,266		7,646		-		11,912			Ten Mile Bore		1,998		-		-		1,998
	Petra		7,372		-		-		7,372			Bella Well		1,996		-		-		1,996
	Coopers		3,996		3,141		-		7,137			Cuthbert Bore		1,639		-		-		1,639
	Salt Soak		5,730		1,063		-		6,793			Speights		1,568		-		-		1,568
	Ranch		6,585		-		-		6,585			Rojo		1,360		-		-		1,360
	Reichelts		-		6,413		-		6,413			Deep Well		1,051		-		-		1,051
	Steer Creek		5,406		-		-		5,406			Camel Hump		981		-		-		981
	Pleco		1,530		3,679		-		5,209			Mt Varden		821		-		-		821
	Ventnor		5,029		-		-		5,029			Slate Well		636		-		-		636
	Russells Find		-		4,863		-		4,863			Butchers Well		592		-		-		592
	Paddy Well		4,448		-		-		4,448			Gloster		-		450		-		450
	Anchor		2,067		2,348		-		4,415			Cork Tree Well		302		-		-		302
	McKenzie Well		3,337		756		-		4,093			Total		74,393		162,118		16,566		253,077

7

Directors’ Report (continued)

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Significant projects advanced during the year ended 30 June 2018 are outlined below.

All drilling results and resource estimations highlighted in this report are detailed fully in announcements to the ASX made by the Company throughout the year, along with the associated JORC 2012 disclosures.

Rosemont Underground

The Rosemont Project commenced in March 2013 and is a fully operational open pit gold mine with a stand-alone crushing and grinding plant, piping an ore slurry to the Garden Well CIL. The geology at Rosemont has gold hosted in a steeply dipping quartz-dolerite unit intruding into a mafic-ultramafic sequence. Gold mineralisation is associated with quartz-albite-carbonate-chlorite-sulphide alteration of the quartz dolerite unit which varies from 5 metres to greater than 100 metres wide.

In March 2018, the Company announced a maiden Inferred Underground Mineral Resource Estimate (MRE) for the Rosemont Underground project of 1.4 million tonnes at 5.10g/t Au for 230,000 ounces of gold.

Drilling completed at Rosemont during the year included RC drilling and diamond drilling programmes to further define high grade gold mineralisation and increase data-density and geological understanding. Both drill programmes were successful in defining high grade gold mineralisation in two distinct zones beneath the life of mine open pit designs to support an underground MRE.

Further drilling is continuing with a focus on defining new high grade shoots in the central zone with RC drilling and extending the existing resources at depth below the current underground (U/G) domains with deeper diamond drilling.

Subsequent to the end of the year, the Regis board approved the development of an U/G mining operation directly below the Rosemont open pit. Development work will commence in the September 2018 quarter, with the ordering of long lead items and an underground mining contract tendering process. Commencement of the portal development in the southern end of the Rosemont Main Pit is expected by March 2019 with processing beginning in the December 2019 quarter.

Garden Well Underground

A review of the historic drilling below the final pit design at Garden Well indicated the potential for a significant underground target below the southern end of the open pit project. During the year, RC and diamond drilling programmes were conducted to test the continuity of high grade gold mineralisation and to reduce drill spacing from 40m x 40m to 40m x 20m. Drilling results have shown significant widths and grades of gold mineralisation and has identified several high grade shoots beneath the pit and further to the south. The southern high grade shoot measures 4-10m width across strike and 200m north-south along strike. The zone of mineralisation is located between 100-350m below surface and dips to the east and is open to the south. Drilling will continue to define the extent of the southern high grade shoots along strike and down plunge.

Baneygo-Idaho Project

The Baneygo-Idaho Gold Project is located 15 kilometres south along strike of the Rosemont Gold Deposit and has a resource of 11 million tonnes at 0.96g/t AU for 340,380 ounces. Gold mineralisation extends over a 2.5 kilometre strike and is hosted in quartz dolerite which has intruded a sequence of mafic-ultramafic-sedimentary units.

A RC infill programme was undertaken during the year with the purpose being to convert inferred resources that may exist inside or below the current pit designs and to ensure drill coverage in gaps in the existing 2.5 kilometre strike with a view to adding further resources. Drilling to date has allowed the estimation of an Ore Reserve of 4 million tonnes at 1.22g/t Au for 158,000 ounces across four shallow oxide pits.

McPhillamys Gold Project NSW

The 100% Regis owned McPhillamys Gold Project is one of Australia’s larger undeveloped open pittable gold resources. The project is located approximately 250 kilometres west of Sydney in Central West NSW, a well-established mining district. In September 2017, Regis announced a maiden Ore Reserve of 60.1 million tonnes at 1.05g/t Au for 2.03 million ounces.

Pre-feasibility level studies show that the McPhillamys Gold Project is a robust, large scale open pit gold mine with a planned 7 million tonne per annum mining and processing operation producing an average of 192,000 ounces per annum over a ten year mine life.

Subsequent to the end of the year, the Company announced that a Preliminary Environmental Assessment (PEA) has been submitted to the NSW Department of Planning and Environment (DPE). The PEA represents the lead document in the development application phase and is the trigger for the DPE to provide the Secretary’s Environmental Assessments Requirements for the project, which will allow for the Environmental Impact Statement to be appropriately focussed to enable regulatory assessment of the project.

8

Directors’ Report (continued)

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Contemporaneous with the preparation of the Environmental Impact Statement, the Company expects to complete the Definitive Feasibility Study by December 2018.

Discovery Ridge Gold Deposit

Approximately 32 kilometres from the McPhillamys Gold Project is the 100% owned Discovery Ridge deposit, a shear hosted gold deposit located in strongly foliated, fine grained metasediments of the Ordovician Coombing and Adaminaby Formations.

The deposit is located within the hinge zone of a tight, steep north plunging D2 fold on the contact of the Adaminaby Group with the Coombing Formation. The deposit has a known strike length in the order of 200 metres and comprises a well-defined steeply north pitching East Lode with widths of around 50 metres and known depths of up to 500 metres and a parallel but more diffuse West Lode of similar orientation.

A total of 5,167 metres of resource and diamond drilling was undertaken during the year which has confirmed the location and tenor of historical gold intercepts which will be included in an updated resource and maiden reserve estimation. Further drilling is planned to test the northern down plunge extension of the eastern following up on a strong intersection.

Infill resource and diamond drilling continues with a Mineral Resource estimation and update and a maiden Ore Reserve is expected to be announced later in the year along with a pre-feasibility study.

Significant Changes in the State of Affairs

There have been no significant changes in the state of affairs other than those listed in the review of operations above.

Significant Events after the Balance Date

Share issue

Subsequent to year end, 425,133 shares have been issued as a result of the exercise of employee options for proceeds of $35,000.

Dividends

On 27 August 2018, the directors proposed a final dividend on ordinary shares in respect of the 2018 financial year. Refer to note 6.

Other than the matters discussed above, there has not arisen in the interval between the end of the financial year and the date of this Report any item, transaction or event of a material and unusual nature which, in the opinion of the directors of the Group, has significantly affected or is likely to significantly affect:

• the operations of the Group;

• the results of those operations; or

• the state of affairs of the Group

in future financial years.

Likely Developments and Expected Results

There are no likely developments of which the directors are aware which could be expected to significantly affect the results of the Group’s operations in subsequent financial years not otherwise disclosed in the Principal Activities and Operating and Financial Review or the Significant Events after the Balance Date sections of the Directors’ Report.

Environmental Regulation and Performance

The operations of the Group are subject to environmental regulation under the laws of the Commonwealth and the States of Western Australia and New South Wales. The Group holds various environmental licenses issued under these laws, to regulate its mining and exploration activities in Australia. These licenses include conditions and regulations in relation to specifying limits on discharges into the air, surface water and groundwater, rehabilitation of areas disturbed during the course of mining and exploration activities and the storage of hazardous substances.

All environmental performance obligations are monitored by the board of directors and subjected from time to time to Government agency audits and site inspections. There have been no material breaches of the Group’s licenses and all mining and exploration activities have been undertaken in compliance with the relevant environmental regulations.

9

Directors’ Report (continued)

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Share Options

Unissued Shares

At the date of this report, the Company had the following unissued shares under listed and unlisted options.

MaturityDate	Exercise Price	Number outstanding
Unlisted options 11 August 2019 13 May 2020 1 July 2021	$1.40 $2.70 $3.90	3,425,000 100,000 1,690,000
Total		5,560,000

Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any related body corporate.

Details of options granted to directors and other key management personnel during the year are set out in the remuneration report.

Shares Issued as a Result of the Exercise of Options

During the financial year, employees exercised unlisted options to acquire 3,417,808 fully paid ordinary shares in Regis Resources Limited at a weighted average exercise price of $1.53 per share.

Indemnification and Insurance of Directors and Officers

The Company has entered into an Indemnity Deed with each of the directors which will indemnify them against liabilities incurred to a third party (not being the Company or any related company) where the liability does not arise out of negligent conduct including a breach of good faith. The Indemnity Deed will continue to apply for a period of 10 years after a director ceases to hold office. The Company has entered into a Director’s Access and Insurance Deed with each of the directors pursuant to which a director can request access to copies of documents provided to the director whilst serving the Company for a period of 10 years after the director ceases to hold office. There are certain restrictions on the directors’ entitlement to access under the deed. In addition the Company will be obliged to use reasonable endeavours to obtain and maintain insurance for a former director similar to that which existed at the time the director ceased to hold office.

The Company has, during or since the end of the financial year, paid an insurance premium in respect of an insurance policy for the benefit of the directors, secretaries, executive officers and employees of the Company and any related bodies corporate as defined in the insurance policy. The insurance grants indemnity against liabilities permitted to be indemnified by the Company under Section 199B of the Corporations Act 2001. In accordance with commercial practice, the insurance policy prohibits disclosure of the terms of the policy including the nature of the liability insured against and the amount of the premium.

Directors’ Meetings

The number of directors’ meetings held (including meetings of Committees of the Board) and number of meetings attended by each of the directors of the Company during the financial year are:

		Audit and Risk Management	Remuneration, Nomination
	Directors’ Meetings	Committee	and DiversityCommittee
M Clark R Kestel J Mactier F Morgan M Okeby P Thomas	No. Eligible to Attend No. Attended 10 10 10 10 10 10 10 10 10 9 10 10	No. Eligible to Attend No. Attended n/a n/a 2 2 2 2 1 1 2 2 n/a n/a	No. Eligible to Attend No. Attended n/a n/a 7 7 7 7 n/a n/a 7 7 n/a n/a

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Directors’ Report (continued)

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Committee Membership

As at the date of this report, the Company had an Audit and Risk Management Committee and a Remuneration, Nomination and Diversity Committee of the board of directors.

Members acting on the committees of the board during the year were:

Audit and Risk Management	Remuneration, Nomination and Diversity
Committee	Committee
R Kestel (Chairman) J Mactier M Okeby F Morgan	R Kestel (Chairman) J Mactier M Okeby

Directors’ Interests in the Shares and Options of the Company

As at the date of this report, the interests of the directors in the options of the Company were unchanged from the holdings as at 30 June 2018 as disclosed in the Remuneration Report. The directors’ interests in the shares of the Company at the date of this report are set out in the table below.

	Number of ordinary
	shares
M Clark R Kestel J Mactier F Morgan M Okeby P Thomas	3,000,000 75,000 - 513,230 700,000 -

Auditor Independence and Non-Audit Services

During the year KPMG, the Group auditor, provided the following non-audit services. The directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The nature and scope of each type of non-audit service provided means that auditor independence was not compromised.

KPMG Australia received or are due to receive the following amounts for the provision of non-audit services:

	$
Tax compliance services Other advisory services	33,700 13,581
	47,281

A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act is attached to the Directors’ Report.

Rounding off

The Company is of a kind referred to in ASIC Instrument 2016/191 dated 24 March 2016 and in accordance with that Instrument, amounts in the Financial Statements and Directors’ Report have been rounded to the nearest thousand dollars, unless otherwise stated.

11

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REMUNERATION REPORT (AUDITED)

This remuneration report for the year ended 30 June 2018 outlines the remuneration arrangements of the Company and the Group in accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This information has been audited as required by section 308(3C) of the Act.

The remuneration report details the remuneration arrangements for key management personnel (KMP) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any director (whether executive or otherwise) of the parent company.

For the purposes of this report, the term “executive” includes the Executive Chairman, senior executives and company secretaries of the Parent and the Group.

Key Management Personnel

Details of KMPs of the Company and Group and their movements during the year ended 30 June 2018 are set out below:

Name	Position	Term as KMP
Non-executive directors M Okeby R Kestel J Mactier F Morgan Executive directors M Clark P Thomas Other executives P Woodman K Massey M Ertzen	Deputy Chairman Non-Executive Director Non-Executive Director Non-Executive Director Executive Chairman Executive Director Chief Geological Officer Chief Financial Officer and Company Secretary Executive General Manager - Growth	Full financial year Full financial year Full financial year Full financial year Full financial year Full financial year Resigned 29 March 2018 Full financial year Appointed as Executive General Manager – Growth, effective 1 April 2018. Previously – General Manager - Business Development

Principles of Remuneration

The Remuneration, Nomination and Diversity Committee is charged with formulating the Group’s remuneration policy, reviewing each director’s remuneration and reviewing the Executive Chairman’s remuneration recommendations for KMPs to ensure compliance with the Remuneration Policy and consistency across the Group. Recommendations of the Remuneration, Nomination and Diversity Committee are put to the Board for approval.

Remuneration levels for KMP are set to attract, retain and incentivise appropriately qualified and experienced directors and executives. We reward executives with a level and mix of remuneration appropriate to their position, responsibilities and performance, in a way that aligns with the business strategy. For the 2018 and subsequent financial years, the Company has implemented an Executive Remuneration Incentive Plan for executive directors and other KMPs which sets out the performance hurdles for both Short Term Incentives (“STI”) and Long Term Incentives (“LTI”).

The objectives and principles of the Company’s remuneration policy include:

• To align the objectives of executive directors and other KMP’s with the interests of shareholders and reflect Company strategy;

• To provide competitive rewards to attract, retain and incentivise high calibre executives; and

• For total remuneration to include a competitive fixed component and an “at risk” component based on performance hurdles and key performance indicators.

In FY18, the STI represented the annual component of the “at risk” reward opportunity which is payable in cash upon the successful achievement of work related financial and non-financial key performance indicators (“KPI”). These KPI’s are chosen to represent the key drivers of short term success for the Company with reference to Regis’ long term strategy.

The LTI refers to the “at risk” reward opportunity which takes the form of performance rights, being the issue of shares in Regis in the future, subject to meeting predetermined performance and vesting conditions.

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Remuneration Report (Audited) (Continued)

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Executive remuneration levels are reviewed annually by the Remuneration, Nomination and Diversity Committee with reference to the remuneration guiding principles and market movements.

The chart below provides a summary of the structure of executive remuneration in the 2018 financial year:

Fixed remuneration

Base salary + superannuation + benefits	Base salary + superannuation + benefits
Variable remuneration STI plan LTI plan � � Cash Performance rights
Cash	Performance rights

To maximise engagement of executives and align with the long-term interests of shareholders, the initial grant of Performance rights in November 2016 had a two year performance/vesting period with a one year holding lock restricting trading on any shares issued under the plan. Subsequent grants of performance rights have a performance/vesting period of three years.

Remuneration Mix – Target

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----- Start of picture text -----

Executive Executive Other
Chairman Director Executives
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Elements of Remuneration in FY18

Fixed remuneration

Fixed remuneration consists of base remuneration (including any fringe benefits tax charges related to employee benefits), as well as employer contributions to superannuation funds. The Group allows KMP to salary sacrifice superannuation for additional benefits (on a total cost basis).

Remuneration levels are reviewed annually by the Remuneration, Nomination and Diversity Committee through a process that considers individual and overall performance of the Group. In addition, external consultants may provide analysis and advice to ensure the KMP’s remuneration is competitive in the market place, as required. In November 2017, BDO Remuneration and Reward Pty Ltd reviewed the existing remuneration arrangements of the Company’s KMPs and made recommendations to the Remuneration, Nomination and Diversity Committee.

Performance linked remuneration

Performance linked remuneration includes both STI and LTI and is designed to reward KMP for meeting or exceeding their KPIs.

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Remuneration Report (Audited) (Continued)

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Short Term Incentive

Short Term Incentive	Short Term Incentive	Short Term Incentive
Under the STI plan, all executives have the opportunity to earn an annual incentive which is delivered in cash. The STI recognises and rewards
annualperformance.
How is itpaid?		Any STI award is paid in cash after the assessment of annual performance.
How much can executives earn?		In FY18, the Executive Chairman and Executive Director had a maximum STI opportunity of 45% and
		40% respectively of fixed remuneration, and other executives had a maximum STI opportunity of
		35% of fixed remuneration.
		An overarching review by the board of each individual’s performance against agreed performance
		measures and a review of quantitative factors around the Company’s performance and the macro
		economic environment will determine the achievable percentage (between 0%-100%) of the
		maximum potential STI available to be awarded, subject further to the level of achievement against
		detailed KPI’s listed below.
		This maximum achievable STI percentage will automatically be 0% in a given financial year in the
		event of a workplace fatality at any of the Company’s operations in that year.
How is performance measured?		A combination of specific Company Key Performance Indicators (KPIs) are chosen to reflect the core
		drivers of short term performance and also to provide a framework for delivering sustainable value
		to the Group and its shareholders.
		The following KPIs were chosen for the 2018 financial year:
		KPI 1: EBITDA relative to internal targets (35%(i));
		KPI 2: Production relative to stated guidance (35%(i)); and
		KPI 3: Safety and environmental performance targets (30%(i)).
When is it paid?		The STI award is determined after the end of the financial year following a review of performance
		over the year against the STI performance measures by the Remuneration, Nomination and Diversity
		Committee. The Board approves the final STI award based on this assessment of performance and
		the award is paid in cash three months after the end of the performance period.
What happens if executive leaves?		If an executive resigns or is terminated for cause before the end of the financial year, no STI is
		awarded for that year. If an executive ceases employment during the performance period by reason
		of redundancy, ill health, death, or other circumstances approved by the Board, the executive will be
		entitled to a pro-rata cash payment based on assessment of performance up to the date of ceasing
		employment for that year (subject to Board discretion).
What happens if there is a change of		In the event of a change of control, a pro-rata cash payment will be made based on assessment of
control?		performance up to the date of the change of control (subject to Board discretion).
(i)	Represents the maximum award if	stretch targets are met.
Long	Term Incentives
Under the LTI plan, annual grants of performance rights are made to executives to align remuneration with the creation of shareholder value
over	the long-term.
How is it paid?		Executives are eligible to receive performance rights (being the issue of shares in Regis in the
		future).
How much can executives earn?		In FY18, the Executive Chairman and Executive Director had a maximum LTI opportunity of 90% and
		75% respectively of fixed remuneration, and other executives had a maximum LTI opportunity of
		65% of fixed remuneration.
		An overarching review by the board of each individual’s performance against agreed performance
		measures and a review of quantitative factors around the Company’s performance and the macro
		economic environment will determine the achievable percentage (between 0%-100%) of the
		maximum potential LTI available to be awarded, subject further to the level of achievement against
		detailed KPI’s listed below.
		This maximum achievable LTI percentage will automatically be 0% in a given financial year in the
		event of a workplace fatality at any of the Company’s operations in that year.

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Remuneration Report (Audited) (Continued)

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How is performance measured?	The vesting of performance rights are subject to a number of vesting conditions. The performance rights issued in FY18 are subject to the following vesting conditions: � Relative Total Shareholder Return (25%(i)) measured on a sliding scale against a select peer group of comparator companies. (ASX code: AQG, BDR DRM, EVN, KRM, MML, MOY, NCM, NST, OGC, PRU, RMS, RSG, SAR, SBM, SLR, TGZ, TRY); � Absolute Total Shareholder Return (25%(i)); � Absolute earnings per share (“EPS”) (25%(i)) measured against a pre-determined target(ii)set by the board (as an average across two 12 month periods); and � Reserve growth and production replacement over the three year vesting period (25%(i)) The performance rights issued in FY17 have a two year performance period with the vesting of the rights tested as at 30 June 2018. All subsequent issues of performance rights have a three year performance period. Any performance rights that do not vest will lapse after testing. There is no re- testing of performance rights. Where an executive ceases to be an employee of any Group Company: � due to resignation or termination for cause, then any unvested rights will automatically lapse on the date of the cessation of employment; or � due to any other reason, then a proportion of any unvested rights will lapse equivalent to the proportion of time remaining in the period during which the relevant vesting conditions must be satisfied and the remaining unvested rights will continue and are still capable of vesting in accordance with the relevant vesting conditions at the end of that period, unless the Board determines otherwise. If a matter, event, circumstance or transaction occurs that the Board reasonably believes may lead to a change of control, the Board may in its discretion determine the treatment and timing of such treatment of any unvested rights and must notify the holder of any changes to the terms of the rights as a result of such a decision. If a change of control occurs and the Board hasn’t made such a decision, all unvested rights will vest and be automatically exercised. Executives are not eligible to receive dividends on unvested performance rights.
When is performance measured?
What happens if executive leaves?
What happens if there is a change of
control?
Are executives eligible for dividends?

(i) Represents the maximum award if stretch targets are met.

(ii) Targets and actual outcomes for each of the STI and LTI performance measures will be disclosed in the relevant remuneration report in the year the award may vest. This is to recognise commercial sensitivity of disclosing key organisational metrics.

Performance and Executive Remuneration Outcomes in FY18

Actual remuneration earned by executives in FY18

The actual remuneration earned by executives in the year ended 30 June 2018 is set out below. This provides shareholders with a view of the remuneration actually paid to executives for performance in 2018 year and the value of LTIs that vested during the period.

Performance against STI measures

A combination of financial and non-financial measures is used to measure performance for STI rewards. Company performance against those measures is as follows for 2018:

KeyPerformance Indicator	Weighting	Metric	Achievement
KPI 1: EBITDA KPI 2: Production KPI 3: Safety and Environment	35% 35% 30%	EBITDA relative to Budget Production relative to stated guidance Reduction in safety and environmental measures	Stretch target achieved – 100% award Threshold target achieved – 65% award Threshold target achieved – 40% award

Based on this assessment, the STI payments for FY2018 to executives were recommended as detailed in the following table:

Name	Position	Achieved STI	STI Awarded
Mark Clark Paul Thomas Kim Massey	Executive Chairman Chief Operating Officer Chief Financial Officer & Company Secretary	% 69.83% 69.83% 69.83%	$ 235,676 167,592 109,982

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Remuneration Report (Audited) (Continued)

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Performance against LTI measures

LTI awards granted in FY18 will be subject to testing at the end of the three year performance period on 30 June 2021. In November 2017, after receiving approval from shareholders at the AGM, 430,440 performance rights were granted in total to the Executive Directors, Mr Mark Clark and Mr Paul Thomas, and to other executives, Mr Kim Massey and Mr Peter Woodman, under the Group’s Executive Incentive Plan (“EIP”). Mr Woodman resigned from his position as Chief Geologist Officer 29 March 2018 and forfeited LTI rewards. Further details of the grant, including performance conditions and the calculation of fair value is disclosed in the Note 23 to the financial statements.

LTI awards granted and approved by shareholders in November 2016 were tested at the end of the two year performance period on 30 June 2018. The Board resolved to vest 100% of the performance rights granted in November 2016, and further instructed that the shares be issued following the release of the 2018 financial report. Further details of the grant, including performance conditions and the calculation of fair value is disclosed in Note 23 to the financial statements.

A number of performance conditions determined the vesting of the performance rights. The outcomes of these performance conditions as tested for the two year performance period ending on 30 June 2018 were as follows:

Performance Condition	Weighting	Metric	Achievement
Relative TSR Absolute TSR EPS Reserves Growth	25% 25% 25% 25%	Company’s relative total shareholder return measured against 17 comparator mining companies Company’s absolute TSR Growth in the Company’s earnings per share Growth in the Company’s ore reserves	Stretch target achieved – 100% award Stretch target achieved – 100% award Stretch target achieved – 100% award Stretch target achieved – 100% award

Based on the outcomes of the performance conditions, the following 2016 performance rights vested and became exercisable on 30 June 2018:

Name	Position	Achieved LTI	LTI Awarded
Mark Clark Paul Thomas Peter Woodman(i) Kim Massey	Executive Chairman Chief Operating Officer Chief Geological Officer Chief Financial Officer & Company Secretary	% 100% 100% - 100%	No. Rights Vested Fair Value 168,000 $319,326 95,333 $181,205 - - 69,333 $131,785

(i) Mr Woodman resigned from his position as Chief Geological Officer on 29 March 2018, resulting in the lapsing of his performance rights prior to vesting.

During the year the following 2017 performance rights were granted:

Name	Position	Achieved LTI	LTI Awarded
Mark Clark Paul Thomas Peter Woodman(i) Kim Massey	Executive Chairman Chief Operating Officer Chief Geological Officer Chief Financial Officer & Company Secretary	% - - - -	No. Rights Granted Fair Value 173,554 $517,581 113,636 $338,891 71,625 $213,604 71,625 $213,604

(ii) Mr Woodman resigned from his position as Chief Geological Officer on 29 March 2018, resulting in the lapsing of his performance rights prior to vesting.

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Statutory performance indicators

The Company aims to align its executive remuneration to its strategic and business objectives and the creation of shareholder wealth. The table below shows measures of the Group’s financial performance over the past five years as required by the Corporations Act 2001 . However these measures are not necessarily consistent with the measures used in determining the variable amounts of remuneration to be awarded to KMPs, as discussed above. As a consequence, there may not always be a direct correlation between the statutory key performance measures and the variable remuneration awarded.

	2018	2017	2016	2015	2014
Revenue Net profit/(loss) after tax Basic earnings/(loss) per share (cents) Diluted earnings/(loss) per share (cents) Net assets	$’000 606,495 174,231 34.60 34.35 636,842	$’000 543,799 138,163 27.59 27.29 538,392	$’000 502,019 111,793 22.37 22.22 481,848	$’000 465,320 86,920 17.39 17.39 409,973	$’000 371,933 (147,830) (29.68) (29.68) 321,060

Performance and Executive Remuneration Arrangements in FY19

Following a review by the Remuneration, Nomination and Diversity Committee and after feedback from shareholders and external advisors, the Board resolved to change the structure of the STI awards for the 2019 and subsequent financial years. The STI awarded will now be payable with 50% in cash, payable 3 months after the end of the financial year and 50% in performance rights which vest 12 months after the end of the financial year. Disqualifying events will apply to the performance rights prior to vesting, including non-performance, a workplace fatality or material one-off write downs and at the discretion of the Board. Subsequent to the end of the 2018 financial year, the Board resolved to set STI and LTI hurdles as follows for the 2019 financial year:

Component

Links to FY2019 Performance

Total Fixed Remuneration (TFR) Short Term Incentives (STI) Long Term Incentives (LTI)

Salaries awarded effective 1 July 2018 used as basis for determining the value component for FY2019 STI and LTI. The maximum STI opportunity that each KMP can earn are: - Executive Chairman 70% - Chief Operating Officer 65% - Other executives 60% The following KPIs were chosen for the 2019 financial year: KPI 1: EBITDA relative to budget (20%(i)); KPI 2: Production relative to stated guidance (20%(i)); KPI 3: Safety and environmental performance measures (20%(i)); KPI 4: McPhillamys Project targets as determined by the Board (20%); and KPI 5: Rosemount underground targets as determined by the Board (20%). The performance rights issued in 2019 are subject to the following vesting conditions: - Relative Total Shareholder Return (20%(i)) measured on a sliding scale against a select peer group of comparator companies (ASX code: DCN, EVN, NCM, NST, OGC, PRU, RSG, SAR, SBM,WGX);. - Absolute Total Shareholder Return (20%(i)); - Absolute Earnings Per Share (“EPS”) (15%(i)) measured against a pre-determined target(ii) set by the Board (as an average across three 12 month periods); - Reserve growth in excess of depletion over the three-year vesting period (15%(i)); - McPhillamys Project targets as determined by the Board (15%); and - Rosemount underground targets as determined by the Board (15%).

(i) Represents the maximum award if stretch targets are met.

Service Contracts

The Group has entered into service contracts with each KMP. The service contract outlines the components of remuneration paid to each key management person but does not prescribe how remuneration levels are modified year to year. Remuneration levels are reviewed each year to take into account cost-of-living changes, any change in the scope of the role performed by the key management person and any changes required to meet the principles of the remuneration policy. No service contract specifies a term of employment or entitlement to performance based incentives, except as detailed below for the Executive Chairman.

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Remuneration Report (Audited) (Continued)

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• Mr Mark Clark , the Company’s Executive Chairman, is employed under a fixed term contract, with the following significant terms: - A term of three years commencing 4 May 2018;

• Fixed remuneration of $821,250 per annum inclusive of superannuation (2017: $766,500) subject to annual review; and

• Opportunity to earn a performance based STI and LTI determined by the Board.

Each key management person, except as specified below, is subject to a notice period of 1 month which the Company may pay in part or full of the required notice period. The key management personnel are also entitled to receive, on termination of employment, statutory entitlements of accrued annual and long service leave, and any accrued superannuation contributions would be paid to their fund. In the case of a genuine redundancy, executives would receive their statutory entitlements based on completed years of service.

The Executive Chairman’s termination provisions are as follows:

			Entitlement to Options and Rights on Termination
	Notice Period	Payment in Lieu of Notice
Employer initiated termination: - without reason - with reason - serious misconduct	3 months plus 9 months’ salary Not less than 3 months 0 – 1 month	12 months Not less than 3 months 0 – 1 month	Options - 1 month to exercise, extendable at Board discretion Rights – refer to LTI details above As above As above
Employee initiated termination	3 months	Not specified
Change of control	1 month plus 12 months’ salary	Not specified

Mr Paul Thomas , the Company’s Chief Operating Officer, is employed under a contract with the following termination provisions:

			Entitlement to Options and Rights
	Notice Period	Payment in Lieu of Notice	on Termination
Employer initiated termination: - with or without reason - serious misconduct	3 months 0 – 1 month	Up to 3 months 0 – 1 month	Options - 1 month to exercise, extendable at Board discretion Rights – refer to LTI details above
Employee initiated termination	3 months	Not specified	As above
Change of control	1 month plus 12 months’ salary	Not specified	As above

Mr Kim Massey , the Company’s Chief Financial Officer and Company Secretary is entitled to 1 months’ notice plus 12 months’ salary in the event of a change of control.

Non-Executive Directors

Total remuneration for all non-executive directors, last voted upon by shareholders at the 2017 AGM, is not to exceed $700,000 per annum. At the date of this report, total non-executive directors’ base fees are $362,000 per annum excluding superannuation. Non-executive directors’ fees cover all main board activities and membership of board committees. Non-executive directors do not receive performance-related compensation and are not provided with any retirement benefits, apart from statutory superannuation. From time to time, non-executive directors may provide additional services to the Company and in these cases they are paid fees in line with industry rates.

The Board has resolved to increase non-executive director fees for 2019. The increase will include both base fees and chair fees and are within the agreed pool for non-executive directors fees.

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Remuneration Report (Audited) (Continued)

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Key Management Personnel Remuneration

Table 1: Remuneration for the year ended 30 June 2018

				Post Employ-	Long-term	Share-based
		Short Term		ment	benefits	Payment
					Accrued
					annual &		Termina-		Perfor-
	Salary &	Cash	Non-Monetary	Superannua-	long service	Options &	tion pay-		mance
2018	Fees	Rewards	Benefits*	tion	leave#	Rights+	ments	Total	Related
Non-executive directors R Kestel(i) J Mactier F Morgan M Okeby(ii) Executive directors M Clark(iv) P Thomas(iv) Other executives K Massey(iv) P Woodman(iii, iv) M Ertzen(v)	$ $ $ 97,000 - - 85,000 - - 85,000 - - 302,468 - - 701,114 235,676 4,756 566,672 167,592 4,756 382,229 109,982 4,756 273,708 - 3,567 75,115 - 1,189			$ $ $ 9,215 - - 8,075 - - 8,075 - - 29,606 - - 25,000 69,491 861,186 25,000 54,223 305,481 25,000 38,486 331,032 19,728 19,837 (131,075) 7,363 8,025 24,853			$ - - - - - - - 5,619 -	$ % 106,215 - 93,075 - 93,075 - 332,074 - 1,897,223 57.81% 1,123,724 42.10% 891,485 49.47% 191,384 - 116,545 21.32%
Total	2,568,306	513,250	19,024	157,062	190,062	1,391,477	5,619	4,844,800

• Non-monetary benefits are presented at actual cost plus any fringe benefits tax paid or payable by the Group.

Long term benefits for accrued annual and long service leave are the movements in the provision, net of any leave taken.

• Represents the statutory remuneration expensed based on fair value at grant date of options and rights over the vesting period of the award. Options have been vested during the year for KMPs as detailed in Table 3. Table 3 reflects the realised benefits of share-based payments for the year.

• (i) Mr Kestel’s fees include an additional $12,000 for chairing the Board Committees.

• (ii) Mr Okeby’s fees includes $207,468 for additional services provided relating to the McPhillamys project.

• (iii) Mr Woodman resigned as Chief Geological Officer effective 29 March 2018.

• (iv) Mr Clark, Mr Thomas, Mr Woodman and Mr Massey elected to receive a portion of their superannuation entitlements above the statutorily required maximum amount as salary.

• (v) Mr Ertzen was appointed as Executive General Manager - Growth on 1 April 2018. The remuneration presented above is only for the period subsequent to this appointment.

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Remuneration Report (Audited) (Continued)

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Table 2: Remuneration for the year ended 30 June 2017

				Post Employ-	Long-term	Share-based
		Short Term		ment	benefits	Payment
					Accrued
			Non-Monetary	Superannua-	annual & long	Options &		Performance
2017	Salary& Fees	Cash Rewards	Benefits*	tion	service leave#	Rights	Total	Related
Non-executive directors G Evans R Kestel J Mactier F Morgan M Okeby Executive directors M Clark P Thomas Other executives K Massey P Woodman	$ 7,083 97,000 85,000 52,362 117,076 653,420 521,590 373,076 367,261	$ - - - - - 205,320 125,474 91,253 91,253	$ - - - - - 3,734 3,734 3,734 3,734	$ 673 9,215 8,075 4,974 8,075 32,083 33,125 29,115 34,075	$ - - - - - 78,441 54,296 47,724 32,406	$ - - - - - 902,692 336,693 322,906 468,703	$ 7,756 106,215 93,075 57,336 125,151 1,875,690 1,074,912 867,808 997,432	% - - - - - 59.07% 43.00% 47.72% 56.14%
Total	2,273,868	513,300	14,936	159,410	212,867	2,030,994	5,205,375

• Non-monetary benefits are presented at actual cost plus any fringe benefits tax paid or payable by the Group.

Long term benefits for accrued annual and long service leave are the movements in the provision, net of any leave taken.

Table 3: Voluntary information – Non-IFRS – Remuneration received by executives for the year ended 30 June 2018

The amounts disclosed below as executive KMP remuneration for 2018 reflect the realised benefits received by each KMP during the reporting period. The remuneration values disclosed below have been determined as follows:

Fixed remuneration

Fixed remuneration includes base salaries received, payments made to superannuation funds, the taxable value of non-monetary benefits received and any once-off payments such as sign-on bonuses or termination benefits, see Table 1 above for details. Fixed remuneration excludes any accruals of annual or long service leave.

Short-term incentives

The cash STI benefits represent the bonuses that were awarded to each KMP in relation to the prior financial year and which were paid in the current financial year.

Long-term incentives

The value of vested options was determined based on the intrinsic value of the options at the date of vesting, being the difference between the share price on that date and the exercise price payable by the KMP. The options that vested during the current year were granted in August 2015 (Mr Thomas and Mr Massey), November 2015 (M Clark) and January 2016 (Mr Woodman). The performance rights that vested during the year were granted in November 2016.

	Fixed Remuneration	Awarded STI (cash)	Vested LTI	Total Value
Executive directors M Clark P Thomas Other executives K Massey P Woodman(i)	$ 771,256 607,006 442,756 336,470	$ 235,676 167,592 109,982 -	$ 2,077,500 692,500 1,435,000 975,000	$ 3,084,432 1,467,098 1,987,738 1,311,470
M Ertzen(ii)	86,052	-	-	86,052
Total executive KMP	2,243,540	513,250	5,180,000	7,936,790
Non-executive directors	624,439	-	-	624,439
Total KMP remuneration	2,867,979	513,250	5,180,000	8,561,229

(i) Mr Woodman resigned as Chief Geological Officer on 29 March 2018.

(ii) Mr Ertzen was appointed as Executive General Manager - Growth on 1 April 2018. The remuneration presented above is only for the period subsequent to this appointment.

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Remuneration Report (Audited) (Continued)

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The amounts disclosed above are not the same as the remuneration expensed in relation to each KMP in accordance with the accounting standards ($4,844,800 for 2018, see Table 1 above). The directors believe that the remuneration received is more relevant to users for the following reasons:

• The statutory remuneration expensed is based on fair value determined at grant date and does not reflect the fair value of the equity instruments when they are actually received by the KMPs.

• The statutory remuneration shows benefits before they are actually received by the KMPs.

• Where options or performance rights do not vest because a market-based performance condition is not satisfied (e.g. absolute TSR), the Company must still recognise the full amount of expenses even though the KMPs will never receive any benefits.

• Share-based payment awards are treated differently under the accounting standards depending on whether the performance conditions are market conditions (no reversal of expense) or non-market conditions (reversal of expense where shares fail to vest), even though the benefit received by the KMP is the same (nil where equity instruments fail to vest).

The accuracy of information in this section has been audited together with the rest of the remuneration report.

Tables 4 & 5: Rights and options over equity instruments granted as compensation

All rights and options refer to rights and options over ordinary shares of Regis Resources Limited, which are exercisable on a one-for-one basis.

There were no options granted to KMPs as compensation during the current year. Details on options granted as compensation in previous years and which have vested during or remain outstanding at the end of the year are provided below.

Options	Granted & Outstanding	Granted & Outstanding	Terms & Conditions for each Grant	Terms & Conditions for each Grant	Terms & Conditions for each Grant	Terms & Conditions for each Grant	Vested	Vested
			Fair value	Exercise				% Vested	% Forfeited
			per option at	price per				during the	during the
	No.	Grant Date	grant date	option	Expirydate	Vestingdate	No.	year	year
M Clark M Clark P Thomas P Thomas P Woodman(i) P Woodman(i) K Massey K Massey M Ertzen(ii) M Ertzen(ii) M Ertzen(ii)	750,000 750,000 250,000 250,000 500,000 500,000 500,000 500,000 50,000 50,000 200,000	12 Nov 15 12 Nov 15 12 Aug 15 12 Aug 15 25 Jan 16 25 Jan 16 12 Aug 15 12 Aug 15 5 Jul 17 5 Jul 17 12 Aug 15	$1.04 $1.27 $0.58 $0.74 $1.00 $1.29 $0.58 $0.74 $1.28 $1.87 $0.74	$1.40 $1.40 $1.40 $1.40 $2.34 $2.34 $1.40 $1.40 $3.90 $3.90 $1.40	11 Aug 19 11 Aug 19 11 Aug 19 11 Aug 19 6 Jan 20 6 Jan 20 11 Aug 19 11 Aug 19 1 Jul 21 1 Jul 21 11 Aug 19	11 Aug 17 11 Aug 18 11 Aug 17 11 Aug 18 25 Jan 18 25 Jan 19 11 Aug 17 11 Aug 18 5 Jul 19 5 Jul 20 11 Aug 18	750,000 - 250,000 - 500,000 - 500,000 - - - -	100% - 100% - 100% - 100% - - - -	- - - - - 100% - - - - -
Total	4,300,000						2,000,000

(i) Mr Woodman resigned as Chief Geological Officer on 29 March 2018 and forfeited the right to the unvested options held at that date.

(ii) Mr Ertzen was appointed as Executive General Manager - Growth on 1 April 2018. Only options vested subsequent to his appointment or remain outstanding at the end of the year are presented in the table above.

All options expire at the earlier of their expiry date or termination of the individual’s employment. Options granted as compensation do not have any vesting conditions other than a continuing employment service condition.

Details on performance rights that were granted as compensation to each KMP during the current year and in previous years and which have vested during or remain outstanding at the end of the year are provided below.

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Remuneration Report (Audited) (Continued)

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								% Vested	% Forfeited
								during the	during the
Rights		Granted			Number	of rights to:		year	year
		Fair Value at					P
Vestingcondition	Grant Date	Grant Date	Test Date	M Clark	P Thomas	K Massey	Woodman(i)
Relative TSR Absolute TSR Earnings per share Ore reserves Relative TSR Absolute TSR Earnings per share Ore reserves	23 Nov 17 23 Nov 17 23 Nov 17 23 Nov 17 18 Nov 16 18 Nov 16 18 Nov 16 18 Nov 16	$2.68 $1.86 $3.69 $3.69 $1.51 $0.97 $2.56 $2.56	30 Jun 20 30 Jun 20 30 Jun 20 30 Jun 20 30 Jun 18 30 Jun 18 30 Jun 18 30 Jun 18	43,388 43,389 43,388 43,389 42,000 42,000 42,000 42,000	28,409 28,409 28,409 28,409 23,833 23,833 23,833 23,834	17,906 17,906 17,906 17,907 17,333 17,333 17,333 17,334	17,906 17,906 17,906 17,907 17,333 17,333 17,333 17,334	- - - - 83% 83% 83% 83%	17% 17% 17% 17% 17% 17% 17% 17%
				341,554	208,969	140,958	140,958
Value of rightsgranted duringtheyear				$517,581	$338,891	$213,604	$213,604

(i) Mr Woodman resigned as Chief Geological Officer on 29 March 2018 and forfeited the right to the unvested performance rights held at that date.

In relation to the performance rights granted in November 2016, the two year performance period during which the performance rights were tested ended on 30 June 2018 with the testing occurring within 60 days after that date. Any performance rights which did not vest lapsed after testing. There is no re-testing of performance rights. In relation to the performance rights granted in November 2017, there is a three year performance period which ends on 30 June 2020.

In addition to a continuing employment service condition, vesting of the performance rights is conditional upon the Group achieving certain performance hurdles. Details of the performance criteria are included in the long-term incentives discussion on page 16.

The value of rights granted during the year is the fair value of the rights calculated at grant date. The total value of the rights granted is included in the table above. This amount is allocated to remuneration over the vesting period (i.e. in years 1 July 2017 to 30 June 2020). No performance rights were exercised during the year.

Table 6: Rights and options over equity instruments

The movement during the reporting period, by number of options over ordinary shares in the Company held, directly, indirectly or beneficially, by each key management person, including their related parties, is as follows:

	Held at start of				Held at end of
	period				period	Vested at 30 June 2018
		Granted as		Net change				Not
	1 July2017	remuneration	Exercised	other	30 June 2018	Total	Exercisable	exercisable
Options M Clark(i) P Thomas(ii) K Massey(iii) P Woodman(iv) M Ertzen(v) Rights M Clark P Thomas K Massey P Woodman	1,500,000 500,000 1,000,000 1,000,000 n/a 168,000 95,333 69,333 69,333	- - - - - 173,554 113,636 71,625 71,625	(750,000) (250,000) (500,000) (500,000) - - - - -	- - - (500,000) 300,000 - - - (140,958)	750,000 250,000 500,000 n/a 300,000 341,554 208,969 140,958 n/a	- - - - - 168,000 95,333 69,333 -	- - - - - 168,000 95,333 69,333 -	- - - - - - - - -

(i) The intrinsic value of options exercised by Mr Clark during the year was $2,077,500. Mr Clark was issued with 750,000 ordinary shares. No amounts remain unpaid on the shares issued.

(ii) The intrinsic value of options exercised by Mr Thomas during the year was $692,500. Mr Thomas exercised his options using the cashless exercise feature available under the Regis ESOP and was issued with 168,605 ordinary shares as a result. No amounts remain unpaid on the shares issued.

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Remuneration Report (Audited) (Continued)

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• (iii) The intrinsic value of options exercised by Mr Massey during the year was $1,435,000. Mr Massey exercised his options using the cashless exercise feature available under the Regis ESOP and was issued with 336,066 ordinary shares as a result. No amounts remain unpaid on the shares issued.

• (iv) The intrinsic value of options exercised by Mr Woodman during the year was $975,000. Mr Woodman exercised his options using the cashless exercise feature available under the Regis ESOP and was issued with 236,486 ordinary shares as a result. No amounts remain unpaid on the shares issued. Mr Woodman resigned as Chief Geological Officer on 29 March 2018 and forfeited all unvested options and rights held at that date.

• (v) Mr Ertzen was appointed as Executive General Manager - Growth on 1 April 2018. “Net change other” represents the number of options and rights held at this date. No options or rights were granted or exercised subsequent to this appointment.

There were no options granted to KMPs during the year, apart from options granted to Mr Ertzen prior to his appointment as a KMP. All unvested options and rights held by Mr Woodman at the date of his resignation were forfeited. Rights granted in the prior year were tested on 30 June 2018 against performance criteria – the portion relating to achieved performance criteria vested and were exercised on that date, and the remaining rights were forfeited. There have been no alterations to the terms and conditions of options or rights awarded as remuneration since their award date.

Table 7: Shareholdings of key management personnel

The movement during the reporting period in the number of ordinary shares in Regis Resources Limited held, directly, indirectly or beneficially, by each key management person, including their related parties, is as follows:

	Held at	On exercise of		Held at
	1 July2017	options	Net change other	30 June 2018
Non-executive directors M Okeby R Kestel J Mactier F Morgan Executive directors M Clark P Thomas Other executives P Woodman(i) K Massey M Ertzen(ii)	700,000 75,000 - 513,230 2,460,000 - - - n/a	- - - - 750,000 168,605 236,486 336,066 -	- - - - (210,000) (168,605) (236,486) (336,066) 200,000	700,000 75,000 - 513,230 3,000,000 - n/a - 200,000
Total	3,748,230	1,491,157	(751,157)	4,488,230

(i) Mr Woodman resigned as Chief Geological Officer on 29 March 2018. He did not hold any shares at this date.

(ii) Mr Ertzen was appointed as Executive General Manager - Growth on 1 April 2018. “Net change other” represents the number of shares held at this date. There was no movement in Mr Ertzen’s shareholding subsequent to this appointment.

Unless stated otherwise, “Net change other” relates to on-market purchases and sales of shares.

All equity transactions with KMP other than those arising from the exercise of remuneration options have been entered into under terms and conditions no more favourable than those the Group would have adopted if dealing at arm’s length.

Loans to key management personnel and their related parties

There were no loans made to any director, key management personnel and/or their related parties during the current or prior years.

Other transactions with key management personnel

For the year ended 30 June 2018, services totalling $645,073 (2017: $335,302) have been provided on normal commercial terms to the Group by Mintrex Pty Ltd, of which Mrs Morgan is Managing Director, Chief Executive Officer and a shareholder. The Company engaged Mintrex during the financial year to engineer preliminary plant designs for the McPhillamys Project. Mrs Morgan and Mintrex have structured their management of this engineering project to ensure she has no involvement in the control or direction of the work. The balance outstanding at 30 June was $30,249, exclusive of GST.

Other than the ordinary accrual of personnel expenses at balance date and transactions disclosed above, there are no other amounts receivable from and payable to key management personnel and their related parties.

23

Remuneration Report (Audited) (Continued)

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Signed in accordance with a resolution of the directors.

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Mr Mark Clark Executive Chairman

Perth, 27 August 2018

24

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Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To the Directors of Regis Resources Limited

I declare that, to the best of my knowledge and belief, in relation to the audit of Regis Resources Limited for the financial year ended 30 June 2018 there have been:

• i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and

• ii. no contraventions of any applicable code of professional conduct in relation to the audit.

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KPMG

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R Gambitta Partner Partner

27 August 2018

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under Professional Standards Legislation.

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 June 2018

		Consolidated	Consolidated
		2018	2017
	Note	$’000	$’000
Revenue Cost of goods sold Gross profit Other income Investor and corporate costs Personnel costs Share-based payment expense Occupancy costs Other corporate administrative expenses Impairment of non-current assets Other expenses Finance costs Profit before tax Income tax expense Profit from continuing operations Profit attributable to members of the parent Other comprehensive income Items that will not be reclassified to profit or loss: Cash flow hedge reserve Unrealised gains/(losses) on cash flow hedges Realised gains transferred to net profit Tax effect Financial assets reserve Changes in the fair value of financial assets designated at fair value through other comprehensive income Tax effect Other comprehensive (loss)/income for the period, net of tax Total comprehensive income for the period	2 3 2 23 15 3 18 5	606,495 (343,585)	543,799 (335,827)
		262,910 3,396 (1,818) (8,479) (3,231) (584) (636) (353) (1,011) (1,273)	207,972 4,962 (2,117) (5,521) (3,222) (585) (312) (2,939) (936) (1,165)
		248,921 (74,690)	196,137 (57,974)
		174,231	138,163
		174,231	138,163
		- (188) 78 - -	(641) (4,177) 1,424 (2,180) 654
		(110)	(4,920)
		174,121	133,243
Total comprehensive income attributable to members of theparent		174,121	133,243
Basic earnings per share attributable to ordinary equity holders of the parent (cents per share) Diluted earnings per share attributable to ordinary equity holders of the parent (cents per share)	4 4	34.60 34.35	27.59 27.29

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

26

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CONSOLIDATED BALANCE SHEET

As at 30 June 2018

		Consolidated	Consolidated
		2018	2017
	Note	$’000	$’000
Current assets Cash and cash equivalents Gold bullion awaiting settlement Receivables Inventories Derivatives Financial assets Other current assets Total current assets Non-current assets Inventories Property, plant and equipment Exploration and evaluation assets Mine properties under development Mine properties Intangible assets Total non-current assets Total assets Current liabilities Trade and other payables Interest-bearing liabilities Income tax payable Provisions Derivatives Total current liabilities Non-current liabilities Interest-bearing liabilities Deferred tax liabilities Provisions Total non-current liabilities Total liabilities	7 8 9 10 19 10 11 12 13 14 16 18 17 18 22 17	181,118 21,160 5,954 43,438 - 344 1,354	119,428 24,934 6,833 39,328 260 263 1,197
		253,368	192,243
		45,986 195,340 171,570 29,578 124,116 2,572	35,452 182,388 151,735 - 123,244 802
		569,162	493,621
		822,530	685,864
		48,635 806 14,242 3,418 -	43,719 1,506 2,193 4,607 102
		67,101	52,127
		36 75,098 43,453	841 49,403 45,101
		118,587	95,345
		185,688	147,472
Net assets		636,842	538,392
Equity Issued capital Reserves Retained profits	21 21	433,248 29,997 173,597	431,491 26,876 80,025
Total equity		636,842	538,392

The above balance sheet should be read in conjunction with the accompanying notes.

27

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 30 June 2018

			Consolidated	Consolidated
					Retained
		Share-based	Financial	Cash flow	profits/
	Issued	payment	assets	hedge	(accumul-
	capital	reserve	reserve	reserve	ted losses)	Total equity
	$’000	$’000	$’000	$’000	$’000	$’000
At 1 July 2017 Profit for the period Other comprehensive income Changes in the fair value of financial assets, net of tax Changes in the value of cash flow hedges, net of tax Total other comprehensive income for the year, net of tax Total comprehensive income for the year, net of tax Transactions with owners in their capacity as owners: Share-based payments expense Dividends paid Shares issued, net of transaction costs	431,491 - - -	25,049 - - -	1,717 - - -	110 - - (110)	80,025 174,231 - -	538,392 174,231 - (110)
	-	-	-	(110)	-	(110)
	-	-	-	(110)	174,231	174,121
	- - 1,757	3,231 - -	- - -	- - -	- (80,659) -	3,231 (80,659) 1,757
At 30 June 2018	433,248	28,280	1,717	-	173,597	636,842
At 1 July 2016 Profit for the period Other comprehensive income Changes in the fair value of financial assets, net of tax Changes in the value of cash flow hedges, net of tax Total other comprehensive income for the year, net of tax Total comprehensive income for the year, net of tax Transactions with owners in their capacity as owners: Share-based payments expense Dividends paid Shares issued, net of transaction costs	431,335 - - -	21,827 - - -	3,243 - (1,526) -	3,504 - - (3,394)	21,939 138,163 - -	481,848 138,163 (1,526) (3,394)
	-	-	(1,526)	(3,394)	-	(4,920)
	-	-	(1,526)	(3,394)	138,163	133,243
	- - 156	3,222 - -	- - -	- - -	- (80,077) -	3,222 (80,077) 156
At 30 June 2017	431,491	25,049	1,717	110	80,025	538,392

The above statement of changes in equity should be read in conjunction with the accompanying notes.

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CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 30 June 2018

		Consolidated	Consolidated
		2018	2017
	Note	$’000	$’000
Cash flows from operating activities Receipts from gold sales Payments to suppliers and employees Option premium income received Interest received Interest paid Proceeds from rental income Income tax paid Net cash from operating activities Cash flows from investing activities Acquisition of property, plant and equipment Proceeds on disposal of property, plant and equipment Payments for exploration and evaluation (net of rent refunds) Payments for acquisition of exploration assets (net of cash) Payments for intangible assets Payments for financial assets Proceeds on disposal of financial assets Payments for mine properties under development Payments for mine properties Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Payment of transaction costs Payment of dividends Repayment of finance lease Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at 1 July	7	608,200 (314,824) 1,197 2,087 (69) 4 (36,868)	540,048 (300,416) 1,302 1,504 (126) - (36,230)
		259,727	206,082
		(37,452) (144) (32,410) (50) (1,490) (82) - (14,053) (31,949)	(23,395) 2 (31,564) (3,370) (802) - 4,154 (9,506) (40,301)
		(117,630)	(104,782)
		1,810 (53) (80,659) (1,505)	175 (19) (80,077) (1,486)
		(80,407)	(81,407)
		61,690 119,428	19,893 99,535
Cash and cash equivalents at 30 June	7	181,118	119,428

The above statement of cash flows should be read in conjunction with the accompanying notes.

29

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NOTES TO THE FINANCIAL STATEMENTS

Basis	of preparation 31
Performance for the year 33
1.	Segment Information .......................................................................................................................................................................................... 33
2.	Revenue and Other Income ................................................................................................................................................................................ 34
3.	Expenses ............................................................................................................................................................................................................... 35
4.	Earnings per Share ............................................................................................................................................................................................... 37
5.	Current Income Tax ............................................................................................................................................................................................. 38
6.	Dividends .............................................................................................................................................................................................................. 38
7.	Cash and Cash Equivalents .................................................................................................................................................................................. 39
Operating assets and liabilities 40
8.	Gold Bullion Awaiting Settlement ....................................................................................................................................................................... 40
9.	Receivables .......................................................................................................................................................................................................... 40
10.	Inventories ........................................................................................................................................................................................................... 41
11.	Property, Plant and Equipment .......................................................................................................................................................................... 42
12.	Exploration and Evaluation Assets ...................................................................................................................................................................... 43
13.	Mine Properties under Development ................................................................................................................................................................. 44
14.	Mine Properties ................................................................................................................................................................................................... 44
15.	Impairment of Non-Financial Assets .................................................................................................................................................................. 46
16.	Trade and Other Payables ................................................................................................................................................................................... 47
17.	Provisions ............................................................................................................................................................................................................. 47
Capital structure, financial instruments and risk 49
18.	Net Debt and Finance Costs ................................................................................................................................................................................ 49
19.	Financial Assets .................................................................................................................................................................................................... 50
20.	Financial Risk Management ................................................................................................................................................................................ 51
21.	Issued Capital and Reserves ................................................................................................................................................................................ 54
Other disclosures 55
22.	Deferred Income Tax ........................................................................................................................................................................................... 55
23.	Share-based Payments ........................................................................................................................................................................................ 57
24.	Related Parties ..................................................................................................................................................................................................... 59
25.	Parent Entity Information ................................................................................................................................................................................... 61
26.	Commitments ...................................................................................................................................................................................................... 61
27.	Contingencies ...................................................................................................................................................................................................... 62
28.	Auditor’s Remuneration ...................................................................................................................................................................................... 62
29.	Subsequent Events .............................................................................................................................................................................................. 63
30.	New Accounting Standards and Interpretations................................................................................................................................................ 63

30

Notes to the Financial Statements: Basis of preparation | 30 June 2018

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Basis of preparation

Regis Resources Limited (“Regis” or the “Company”) is a for profit company limited by shares, incorporated and domiciled in Australia, whose shares are publicly traded on the Australian Securities Exchange. Its registered office and principal place of business is:

Regis Resources Limited

Level 1 1 Alvan Street Subiaco WA 6008

A description of the nature of operations and principal activities of Regis and its subsidiaries (collectively, the “Group”) is included in the Directors’ Report, which is not part of these financial statements.

The financial statements were authorised for issue in accordance with a resolution of the directors on 27 August 2018.

The financial report is a general purpose financial report which:

• has been prepared in accordance with the requirements of the Corporations Act 2001 , Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB);

• has been prepared on a historical cost basis except for assets and liabilities and share-based payments which are required to be measured at fair value. The basis of measurement is discussed further in the individual notes;

• is presented in Australian dollars with all values rounded to the nearest thousand dollars ($’000) unless otherwise stated, in accordance with ASIC Instrument 2016/191;

• presents reclassified comparative information where required for consistency with the current year’s presentation;

• adopts all new and amended Accounting Standards and Interpretations issued by the AASB that are relevant to the operations of the Group and effective for reporting periods beginning on or after 1 July 2016. Refer to note 30 for further details;

• does not early adopt Accounting Standards and Interpretations that have been issued or amended but are not yet effective. Refer to note 30 for further details.

Principles of consolidation

The consolidated financial statements comprise the financial statements of the Group. A list of controlled entities (subsidiaries) at year end is contained in note 24.

The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.

In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profits and losses resulting from intra-group transactions have been eliminated. Subsidiaries are consolidated from the date on which control is obtained to the date on which control is disposed. The acquisition of subsidiaries is accounted for using the acquisition method of accounting.

Foreign currencies

Both the functional currency of each entity within the Group and the Group’s presentation currency is Australian dollars.

Transactions in foreign currencies are initially recorded in Australian dollars at the exchange rate on that day. Foreign currency monetary assets and liabilities are translated to Australian dollars at the reporting date exchange rate. Foreign currency gains and losses are generally recognised in profit or loss.

Other accounting policies

Significant and other accounting policies that summarise the measurement basis used and are relevant to an understanding of the financial statements are provided throughout the notes to the financial statements. Where possible, wording has been simplified to provide clearer commentary on the financial report of the Group. Accounting policies determined non-significant are not included in the financial statements. There have been no changes to the Group’s accounting policies that are no longer disclosed in the financial statements.

31

Notes to the Financial Statements: Basis of preparation | 30 June 2018

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Key estimates and judgements

In the process of applying the Group’s accounting policies, management has made a number of judgements and applied estimates of future events. Judgements and estimates which are material to the financial report are found in the following notes.

Note	3	Expenses	Page 35
Note	10	Inventories	Page 41
Note	12	Exploration and evaluation assets	Page 43
Note	14	Mine properties	Page 44
Note	15	Impairment	Page 46
Note	17	Provisions	Page 47
Note	22	Deferred income tax	Page 55
Note	23	Share-based payments	Page 57

The notes to the financial statements

The notes include information which is required to understand the financial statements and is material and relevant to the operations and the financial position and performance of the Group. Information is considered relevant and material if, for example:

• the amount is significant due to its size or nature;

• the amount is important for understanding the results of the Group;

• it helps to explain the impact of significant changes in the Group’s business; or

• it relates to an aspect of the Group’s operations that is important to its future performance.

The notes are organised into the following sections:

• Performance for the year;

• Operating assets and liabilities;

• Capital structure and risk;

• Other disclosures.

A brief explanation is included under each section.

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Performance for the year

This section focuses on the results and performance of the Group. This covers both profitability and the resultant return to shareholders via earnings per share combined with cash generation and the return of cash to shareholders via dividends.

1. Segment Information

Operating segments are reported in a manner that is consistent with the internal reporting provided to the Executive Chairman and his executive management team (the chief operating decision makers). The Group has two reportable segments which comprise the Duketon Gold Project; being Duketon North Operations (“DNO”), currently comprising Moolart Well, Gloster, Anchor and Dogbolter and Duketon South Operations (“DSO”), currently incorporating Garden Well, Rosemont, Erlistoun and Tooheys Well. The segments are unchanged from those reported at 30 June 2017. A number of new mining operations at satellite pits will commence in the next several years. In addition to current pits, DNO will include Petra as it will be processed through the Moolart Well processing plant. DSO will add Baneygo and the other satellite projects in that area to the Garden Well leaching circuit.

Unallocated items comprise corporate administrative costs (including personnel costs, share based payments, occupancy costs and investor and corporate costs), interest revenue, finance costs, net gains and losses on derivatives, exploration and evaluation assets relating to areas of interest where an economically recoverable reserve is yet to be delineated, cash, derivative assets and income tax assets.

Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, conduct exploration and evaluation activities and develop mine properties.

The following table presents financial information for reportable segments for the years ended 30 June 2018 and 30 June 2017:

	Duketon North Operations	Duketon North Operations	Duketon South Operations	Duketon South Operations	Unallocated	Unallocated	Total	Total
	2018	2017	2018	2017	2018	2017	2018	2017
Continuing Operations Segment revenue Sales to external customers Other revenue Total segment revenue Total revenue per the statement of comprehensive income Interest expense Impairment of non-current assets Depreciation and amortisation Depreciation capitalised Total depreciation and amortisation recognised in the statement of comprehensive income Segment result Segment net operating profit/(loss) before tax Segment assets Segment assets at balance date Capital expenditure for the year	$’000	$’000	$’000	$’000	$’000	$’000	$’000	$’000
	175,568	170,065	428,857	372,153	-	-	604,425	542,218
	-	-	-	-	2,070	1,581	2,070	1,581
	175,568	170,065	428,857	372,153	2,070	1,581	606,495	543,799
							606,495	543,799
	-	-	-	-	69	126	69	126
	-	-	-	-	353	2,939	353	2,939
	17,677	18,061	46,635	39,392	265	218	64,577	57,671
							(140)	(90)
							64,437	57,581
	84,438	80,724	177,167	127,455	(12,684)	(12,042)	248,921	196,137
	88,429	82,066	338,141	308,108	395,960	295,690	822,530	685,864
	18,997	18,436	58,701	46,622	51,614	32,306	129,312	97,364

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Notes to the Financial Statements: Performance for the year | 30 June 2018

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2. Revenue and Other Income

Accounting Policies

Gold sales

Revenue is recognised and measured at the fair value of the consideration received or receivable, when the amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the Group. The specific recognition criteria for the Group’s gold sales is upon dispatch of the gold bullion from the mine site as this is the point at which the significant risks and rewards of ownership and control of the product passes to the customer. Adjustments are made for variations in gold price, assay and weight between the time of dispatch and the time of final settlement.

Interest

Interest income is recognised as it accrues using the effective interest method.

	Consolidated	Consolidated
	2018	2017
	$’000	$’000
Revenue
Gold sales Interest	604,425 2,070	542,218 1,581
	606,495	543,799

Gold forward contracts

As part of the risk management policy of the Group and in compliance with the conditions required by the Group’s financier, the Group enters into gold forward contracts to manage the gold price of a proportion of anticipated gold sales. The counterparty to the gold forward contracts is Macquarie Bank Limited (“MBL”).

It is management’s intention to settle each contract through physical delivery of gold and as such, the gold forward sale contracts disclosed below do not meet the criteria of financial instruments for accounting purposes. This is referred to as the “normal purchase/sale” exemption. Accordingly, the contracts will be accounted for as sale contracts with revenue recognised once the gold has been delivered to MBL or its agent.

Open contracts at balance date are summarised in the table below:

Within one year - Spot deferred contracts(ii) Mark-to-market has been cal	Gold for physical	Gold for physical	Contracted gold	Contracted gold	Value of committed	Value of committed
	delivery		sale	price	sales		Mark-to-market(i)
	2018	2017	2018	2017	2018	2017	2018	2017
	ounces	ounces	$/oz	$/oz	$’000	$’000	$’000	$’000
		396,406				614,718		(25,386)
	388,711		1,555		604,635		(54,151)
	388,711	396,406			604,635	614,718	(54,151)	(25,386)
								$1,615/oz
							$1,693/oz

• (i) Mark-to-market represents the value of the open contracts at balance date, calculated with reference to the gold spot price at that date. A negative amount reflects a valuation in the counterparty’s favour.

• (ii) The contracted gold sale price disclosed for spot deferred contracts reflects a weighted average of a range of contract prices. The range of prices at the end of the year was from $1,416/oz to $1,821/oz (2017: $1,408/oz to $1,810/oz).

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	Consolidated	Consolidated
	2018	2017
	$’000	$’000
Other income Rehabilitation provision adjustment Net gain on financial instruments at fair value through profit or loss Ineffectiveness on commodity swap contracts designated as cash flow hedges Rental income	2,165 1,299 (72) 4	2,977 1,913 72 -
	3,396	4,962

The net gain on financial instruments at fair value through profit or loss relates to sold gold call options that do not qualify for hedge accounting. During the current financial year, the Group sold gold call options for 20,000 ounces with a weighted average exercise price of $1,684/oz (2017: 35,000 ounces at A$1,716/oz). Offsetting the premium income received during the current year is the fair value of open contracts at balance date, recognised on the balances sheet as “derivative liabilities”.

3. Expenses

Accounting Policies

Cash costs of production

Cash costs of production is a component of cost of goods sold and includes direct costs incurred for mining, milling, laboratory and mine site administration, net of costs capitalised to pre-strip and production stripping assets. This category also includes movements in the cost of inventory and any net realisable value write downs.

	Consolidated	Consolidated
	2018	2017
	$’000	$’000
Cost of goods sold Cash costs of production Royalties Depreciation of mine plant and equipment Amortisation of mine properties	252,948 26,325 29,703 34,609	255,074 23,300 31,484 25,969
	343,585	335,827

Depreciation

Depreciation of mine specific plant and equipment and buildings and infrastructure is charged to the statement of comprehensive income on a unit-of-production basis over the economically recoverable reserves of the mine concerned, except in the case of assets whose useful life is shorter than the life of the mine, in which case the straight-line method is used. The unit of account is tonnes of ore milled.

Depreciation of non-mine specific plant and equipment is charged to the statement of comprehensive income and exploration and evaluation assets on a straight-line basis over the estimated useful lives of each part of an item of plant and equipment in current and comparative periods as follows:

• Plant and equipment: 3 - 20 years

• Fixtures and fittings: 3 - 20 years

• Leasehold improvements: 10 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

Amortisation

Mine properties are amortised on a unit-of-production basis over the economically recoverable reserves of the mine concerned. The unit of account is tonnes of ore milled.

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Notes to the Financial Statements: Performance for the year | 30 June 2018

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	Consolidated	Consolidated
	2018	2017
	$’000	$’000
Depreciation and amortisation Depreciation expense Amortisation expense Less: Amounts capitalised Depreciation and amortisation charged to the statement of comprehensive income	29,968 34,609 (140)	31,702 25,969 (90)
	64,437	57,581
Keyestimates and assumptions
Unit-of-production method of depreciation/amortisation
The Group uses the unit-of-production basis when depreciating/amortising life of mine specific assets which results in a depreciation/amortisation charge proportionate to the depletion of the anticipated remaining life of mine production. Each item’s economic life, which is assessed annually, has due regard for both its physical life limitations and to present assessments of economically recoverable reserves of the minepropertyat which it is located.

	Consolidated	Consolidated
	2018	2017
	$’000	$’000
Employee benefits expense Wages and salaries Defined contribution superannuation expense Share-based payments expense 23 Employee bonuses Other employee benefits expense Less: Amounts capitalised Employee benefits expense recognised in the statement of comprehensive income Lease payments and other expenses included in the statement of comprehensive income Minimum lease payments – operating lease Less: Amounts capitalised Recognised in the statement of comprehensive income Other expenses Gold swap fees Non-capital exploration expenditure Loss on disposal of assets	38,750 3,569 3,231 1,473 3,966	35,700 3,235 3,222 335 2,425
	50,989 (6,047)	44,917 (4,826)
	44,942	40,091
	384 (115)	380 (114)
	269	266
	- 867 144	49 804 83
	1,011	936

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Notes to the Financial Statements: Performance for the year | 30 June 2018

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4. Earnings per Share

Accounting Policy

Earnings per share (“EPS”) is the amount of post-tax profit attributable to each share. The Group presents basic and diluted EPS data for ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period.

Diluted EPS takes into account the dilutive effect of all potential ordinary shares, being unlisted employee share options and performance rights on issue.

	Consolidated	Consolidated
	2018	2017
	$’000	$’000
Earnings used in calculating EPS
Net profit attributable to ordinary equity holders of the parent Weighted average number of shares Issued ordinary shares at 1 July Effect of shares issued Weighted average number of ordinary shares at 30 June Effect of dilution: Share options Performance rights Weighted average number of ordinary shares adjusted for the effect of dilution	174,231	138,163
	No. shares	No. shares
	(‘000s)	(‘000s)
	501,020 2,597	499,854 928
	503,617 2,885 692	500,782 5,225 247
	507,194	506,254

There have been no transactions involving ordinary shares between the reporting date and the date of completion of these financial statements which would impact on the above EPS calculations.

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Notes to the Financial Statements: Performance for the year | 30 June 2018

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5. Current Income Tax

Accounting Policy

Current tax

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

The major components of income tax expense are: Current income tax Current income tax expense Adjustment in respect of income tax of previous years Deferred income tax Relating to the origination and reversal of temporary differences Adjustment in respect of income tax of previous years Income tax expense reported in the statement of comprehensive income Deferred tax payable/(receivable) related to items recognised in OCI during the year Net (loss)/gain on revaluation of cash flow hedges Net (loss)/gain on financial assets Deferred tax charged to OCI A reconciliation between tax expense and the product of accounting profit before tax multiplied by the Group’s applicable income tax rate is as follows: Accounting profit before income tax At the Group’s statutory income tax rate of 30% (2017: 30%) Share-based payments Other non-deductible items Adjustment in respect of income tax of previous years Income tax expense reported in the statement of comprehensive income 6. Dividends Declared and paid during the year: Dividends on ordinary shares Final dividend for 2017: 8 cents per share (2016: 9 cents per share) Interim franked dividend for 2018: 8 cents per share (2017: 7 cents per share) Proposed by the directors after balance date but not recognised as a liability at 30 June: Dividends on ordinary shares Final dividend for 2018: 8 cents per share (2017: 8 cents per share) Dividend franking account Amount of franking credits available to shareholders of Regis Resources Limited for subsequent financial years The ability to utilise the franking credits is dependent upon the ability to declare dividends.		Consolidated 2018 2017 $’000 $’000 47,054 30,198 1,862 (3,635) 28,749 29,614 (2,975) 1,797
		74,690 57,974
		(78) (1,424) - (654)
		(78) (2,078)
		248,921 196,137
		74,676 58,841 969 966 158 5 (1,113) (1,838)
		74,690 57,974
		Consolidated 2018 2017 $’000 $’000 40,312 45,007 40,347 35,070
		80,659 80,077
		40,389 40,143
		19,974 5,625

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Notes to the Financial Statements: Performance for the year | 30 June 2018

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7. Cash and Cash Equivalents

Accounting Policy

Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term deposits with an original maturity of 3 months or less that are readily convertible to known amounts of cash and which are subject to insignificant changes in value. Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

At 30 June 2018, the Group had no undrawn, committed borrowing facilities available (2017: nil). Refer to note 18.

	Consolidated	Consolidated
	2018	2017
	$’000	$’000
Cash and cash equivalents in the balance sheet and cash flow statement Cash at bank and on hand Short-term deposits	181,118 -	69,428 50,000
	181,118	119,428

Restrictions on cash

The Group is required to maintain $203,000 (2017: $161,000) on deposit to secure bank guarantees in relation to the Perth office lease and two new office leases in NSW. The amount will be held for the term of the lease. In September 2018 the Group will be required to provide a bank guarantee of $280,000 in relation to the new Perth office lease. Refer to note 26.

Reconciliation of profit after income tax to net cash inflow from operating activities Net profit for the year Adjustments for: Impairment of non-current assets 15 Unwinding of discount on provisions 18 Loss on disposal of assets Unrealised (loss)/gain on derivatives Share-based payments Rehabilitation provision adjustment Depreciation and amortisation Changes in assets and liabilities (Increase)/decrease in gold bullion awaiting settlement (Increase)/decrease in receivables (Increase)/decrease in inventories (Increase)/decrease in other current assets Increase/(decrease) in income tax payable Increase/(decrease) in trade and other payables Increase/(decrease) in deferred tax liabilities Increase/(decrease) in provisions Net cash from operating activities	Consolidated 2018 2017 $’000 $’000 174,231 138,163
	353 2,939 1,204 1,039 144 83 (30) (683) 3,231 3,222 (2,165) (2,977) 64,437 57,581 3,775 (2,170) 45 (365) (13,476) (18,669) (119) (64) 12,049 (7,308) (9,289) 7,539 25,772 29,053 (435) (1,301)
	259,727 206,082

39

Notes to the Financial Statements: Operating assets and liabilities | 30 June 2018

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Operating assets and liabilities

This section shows the assets used to generate the Group’s trading performance and the liabilities incurred as a result. Liabilities relating to the Group’s financing activities are addressed in the capital structure and finance costs section on page 49.

8. Gold Bullion Awaiting Settlement

Accounting Policy

Bullion awaiting settlement comprises gold that has been received by the refiner prior to period end but which has not yet been delivered into a sale contract. Bullion awaiting settlement is initially recognised at the expected selling price and adjustments for variations in the gold price are made at the time of final settlement.

Due to the short-term nature of the bullion awaiting settlement, the carrying value is assumed to approximate fair value. The maximum exposure to credit risk is the fair value.

	Consolidated
	2018	2017
	$’000	$’000
Current
Gold bullion awaiting settlement	21,160	24,934

At balance date, gold bullion awaiting settlement comprised 12,447 ounces valued at a weighted average realisable value of $1,700/oz (2017: 15,487 ounces at $1,610/oz).

9. Receivables

Accounting Policy

Receivables are initially recognised at fair value and subsequently at the amounts considered receivable (financial assets at amortised cost). Balances within receivables do not contain impaired assets, are not past due and are expected to be received when due.

The Group does not have trade receivables in relation to gold sales. The only material receivables at year end are for GST and fuel tax credits receivable from the Australian Taxation Office and therefore, the Group is not generally exposed to credit risk in relation to its receivables.

Due to the short-term nature of these receivables, their carrying value is assumed to approximate fair value.

Current GST receivable Fuel tax credit receivable Security deposit for land acquisition Interest receivable Dividend trust account Other receivables	Consolidated 2018 2017 $’000 $’000 3,447 3,323 1,637 1,570 - 974 201 217 441 498 228 251
	5,954 6,833

40

Notes to the Financial Statements: Operating assets and liabilities | 30 June 2018

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10. Inventories

Accounting Policy

Gold bullion, gold in circuit and ore stockpiles are physically measured or estimated and valued at the lower of cost and net realisable value. Cost is determined by the weighted average method and comprises direct purchase costs and an appropriate portion of fixed and variable overhead costs, including depreciation and amortisation, incurred in converting ore into gold bullion. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and costs of selling the final product, including royalties.

Consumable stores are valued at the lower of cost and net realisable value. The cost of consumable stores is measured on a first-in first-out basis.

Inventories expected to be sold (or consumed in the case of stores) within 12 months after the balance sheet date are classified as current assets, all other inventories are classified as non-current.

Current Ore stockpiles Gold in circuit Bullion on hand Consumable stores Non-current Ore stockpiles	Consolidated 2018 2017 $’000 $’000 26,394 25,894 9,123 6,098 4,263 4,254 3,658 3,082
	43,438 39,328
	45,986 35,452

At 30 June 2017, all inventories were carried at cost, except for a portion of ore stockpiles that were reclassified as non-current as a result of the annual update of life of mine plans and written down to net realisable value resulting in an expense totalling $1,440,000 being recognised in cost of goods sold.

At 30 June 2018, there was no expense recognised in costs of goods sold for inventories carried at net realisable value.

Key estimates and assumptions

Inventories

Net realisable value tests are performed at each reporting date and represent the estimated future sales price of the product based on prevailing spot metals process at the reporting date, less estimated costs to complete production and bring the product to sale.

Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the number of contained gold ounces based on assay data, and the estimated recovery percentage. Stockpile tonnages are verified by periodic surveys.

41

Notes to the Financial Statements: Operating assets and liabilities | 30 June 2018

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11. Property, Plant and Equipment

Accounting Policy

The value of property, plant and equipment is measured as the cost of the asset, less accumulated depreciation and impairment. The cost of the asset also includes the cost of replacing parts that are eligible for capitalisation, the cost of major inspections and an initial estimate of the cost of dismantling and removing the item from site at the end of its useful life (rehabilitation provisions). Changes in the rehabilitation provisions resulting from changes in the size or timing of the cost or from changes in the discount rate are also recognised as part of the asset cost.

Derecognition

An item of property, plant and equipment is derecognised when it is sold or otherwise disposed of, or when its use is expected to bring no further economic benefits. Any gain or loss from derecognising the asset (the difference between the proceeds on disposal and the carrying amount of the asset) is included in the income statement in the period the item is derecognised.

		Consolidated	Consolidated
	Freehold Leasehold Plant &	Furniture & Buildings & Capital
	Land Improvements Equipment	Equipment Infrastructure WIP Total
	$’000 $’000 $’000	$’000 $’000	$’000 $’000
Net carrying amount at 1 July 2017 Additions Depreciation expense Transfers to mine properties Transfers between classes Rehabilitation provision adjustments Disposals Net carrying amount at 30 June 2018 At 30 June 2018 Cost Accumulated depreciation Net carrying amount Net carrying amount at 1 July 2016 Additions Depreciation expense Transfers to mine properties Transfers between classes Rehabilitation provision adjustments Disposals Net carrying amount at 30 June 2017 At 1 July 2016 Cost Accumulated depreciation Net carrying amount At 30 June 2017 Cost Accumulated depreciation Net carrying amount	16,488 303 104,224 17,264 - 8,496 - (76) (18,705) - - - - - 1,180 - - (29) - - (192)	600 52,288 249 3,171 (194) (10,993) - - 169 5,298 - 2,358 - -	8,485 182,388 11,629 40,809 - (29,968) (26) (26) (6,647) - - 2,329 - (192)
	33,752 227 94,974	824 52,122	13,441 195,340
	33,752 762 243,392 - (535) (148,418)	2,218 112,955 (1,394) (60,833)	13,441 406,520 (-) (211,180)
	33,752 227 94,974	824 52,122	13,441 195,340
	16,488 341 114,609 - 28 6,400 - (76) (21,306) - - - - 10 4,551 - - 55 - - (85)	616 47,561 108 9,361 (176) (10,144) - - 52 3,259 - 2,251 - -	8,048 187,663 8,327 24,224 - (31,702) (18) (18) (7,872) - - 2,306 - (85)
	16,488 303 104,224	600 52,288	8,485 182,388
	16,488 725 223,997 - (384) (109,388)	1,663 88,104 (1,047) (40,543)	8,048 339,025 - (151,362)
	16,488 341 114,609	616 47,561	8,048 187,663
	16,488 762 234,758 - (459) (130,534)	1,817 102,539 (1,217) (50,251)	8,485 364,849 - (182,461)
	16,488 303 104,224	600 52,288	8,485 182,388

42

Notes to the Financial Statements: Operating assets and liabilities | 30 June 2018

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12. Exploration and Evaluation Assets

Accounting Policy

Exploration and evaluation expenditure is accumulated on an area of interest basis. Exploration and evaluation assets include the costs of acquiring licences, costs associated with exploration and evaluation activity, and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Expenditure is carried forward when incurred in areas for which the Group has rights of tenure and where economic mineralisation is indicated, but activities have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active and significant operations in, or in relation to, the area of interest are continuing. Costs incurred before the Group has obtained the legal rights to explore an area are recognised in the statement of comprehensive income.

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mine properties under development. No amortisation is charged during the exploration and evaluation phase.

under development. No amortisation is charged duringthe exploration and evaluationphase.
	Consolidated
	2018	2017
	$’000	$’000
Reconciliation of movements during the year Balance at 1 July Expenditure for the period Acquisition of tenements Impairment 15 Transferred to mine properties under development 13 Transferred to mine properties 14 Balance at 30 June	151,735 33,444 50 (353) (12,918) (388)	123,739 31,976 3,382 (2,917) - (4,445)
	171,570	151,735

Impairment

Exploration and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units (“CGUs”) to which the exploration activity relates. The CGU is not larger than the area of interest.

Carrying value by area of interest Duketon North Operations Duketon South Operations Duketon Gold Project satellite deposits Regional WA exploration NSW exploration	9,118 8,868 27,323 14,281 5,466 12,757 13,610 9,267 116,053 106,562
	171,570 151,735

Key estimates and assumptions Impairment of exploration and evaluation assets The future recoverability of capitalised exploration and evaluation expenditure is dependent upon a number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale. Factors that could impact future recoverability include the level of reserves and resources, future technological changes which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices. To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, profits and net assets will be reduced in the period in which the determination is made.

43

Notes to the Financial Statements: Operating assets and liabilities | 30 June 2018

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Exploration expenditure commitments

Exploration expenditure commitments represent tenement rentals and expenditure requirements that may be required to be met under the relevant legislation should the Group wish to retain tenure on all current tenements in which the Group has an interest.

The terms and conditions under which the Group retains title to its various mining tenements oblige it to meet tenement rentals and minimum levels of exploration expenditure as gazetted by the Western Australian and New South Wales state governments, as well as local government rates and taxes.

The exploration commitments of the Group not provided for in the consolidated financial statements and payable are as follows:

Consolidated	Consolidated
2018	2017
$’000	$’000
Within one year 1,668	2,317

The tenement commitments shown above represent the minimum required to be spent on all granted tenements as at reporting date. Actual expenditure will vary as a result of ongoing management of the tenement portfolio including reductions and relinquishment of tenements not considered prospective, in whole or in part.

Tenement commitments are shown gross of exemptions that are likely to be available in the ordinary course of business as the financial impact of potential exemptions cannot be measured reliably in advance.

13. Mine Properties under Development

Accounting Policy

Mine properties under development represents the costs incurred in preparing mines for production and includes plant and equipment under construction and operating costs incurred before production commences. These costs are capitalised to the extent they are expected to be recouped through the successful exploitation of the related mining leases. Once production commences, these costs are transferred to property, plant and equipment and mine properties, as relevant, and are depreciated and amortised using the units-of-production method based on the estimated economically recoverable reserves to which they relate or are written off if the mine property is abandoned.

	Consolidated	Consolidated
	2018	2017
	$’000	$’000
Balance at beginning of period Pre-production expenditure capitalised Transferred from exploration 12 Transferred to inventory Transferred to mine properties 14 Balance at end of period	- 17,831 12,918 (1,168) (3)	1,199 9,158 - (1,111) (9,246)
	29,578	-

14. Mine Properties

Accounting Policies

Production stripping costs

Once access to the ore is attained, all waste that is removed from that point forward is considered production stripping activity. The amount of production stripping costs deferred is based on the extent to which the current period cost per tonne of ore mined exceeds the expected cost per tonne for the life of the identified component. A component is defined as a specific volume of the ore body that is made more accessible by the stripping activity, and is identified based on the mine plan.

The production stripping asset is initially measured at cost, which is the accumulation of costs directly incurred to perform the stripping activity that improves access to the identified component of the ore body. The production stripping asset is then carried at cost less accumulated amortisation and any impairment losses.

The production stripping asset is amortised over the expected useful life of the identified component (determined based on economically recoverable reserves), on a unit of production basis. The unit of account is tonnes of ore mined.

44

Notes to the Financial Statements: Operating assets and liabilities | 30 June 2018

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Pre-strip costs

In open pit mining operations, it is necessary to remove overburden and waste materials to access the ore. This process is referred to as stripping and the Group capitalises stripping costs incurred during the development of a mine (or pit) as part of the investment in constructing the mine (“pre-strip”). These costs are subsequently amortised over the life of mine on a units of production basis, where the unit of account is tonnes of ore milled.

Other mine properties

Other mine properties represent expenditure in respect of exploration, evaluation, feasibility and pre-production operating costs incurred by the Group previously accumulated and carried forward in mine properties under development in relation to areas of interest in which mining has now commenced. Other mine properties are stated at cost, less accumulated amortisation and accumulated impairment losses.

Other mine properties are amortised on a unit-of-production basis over the economically recoverable reserves of the mine concerned. The unit of account is tonnes of ore milled.

		Consolidated
	Production	Pre-strip Other Mine
	StrippingCosts	Costs Properties	Total
	$’000	$’000 $’000	$’000
Net carrying amount at 1 July 2017 Additions Transfers from exploration and evaluation assets Transfers from pre-production Transfers from property, plant and equipment Rehabilitation provision adjustment Amortisation expense Net carrying amount at 30 June 2018 At 30 June 2018 Cost Accumulated amortisation Net carrying amount Net carrying amount at 1 July 2016 Additions Transfers from exploration and evaluation assets Transfers from pre-production Transfers from property, plant and equipment Rehabilitation provision adjustment Amortisation expense Net carrying amount at 30 June 2017 At 30 June 2017 Cost Accumulated amortisation Net carrying amount At 1 July 2016 Cost Accumulated amortisation Net carrying amount	41,887 30,188 - - - - (11,158)	40,819 40,538 7,796 416 - 388 - 3 - - - (3,310) (12,257) (11,194)	123,244 38,400 388 3 - (3,310) (34,609)
	60,917	36,358 26,841	124,116
	93,751 (32,834)	89,950 94,300 (53,592) (67,459)	278,001 (153,885)
	60,917	36,358 26,841	124,116
	19,969 22,398 - 4,321 - - (4,801)	37,334 26,055 11,213 7,535 - 4,445 3,606 1,319 - 18 - 11,000 (11,334) (9,834)	83,358 41,146 4,445 9,246 18 11,000 (25,969)
	41,887	40,819 40,538	123,244
	63,563 (21,676)	82,154 96,803 (41,335) (56,265)	242,520 (119,276)
	41,887	40,819 40,538	123,244
	36,843 (16,874)	67,335 72,486 (30,001) (46,431)	176,664 (93,306)
	19,969	37,334 26,055	83,358

45

Notes to the Financial Statements: Operating assets and liabilities | 30 June 2018

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Key estimates and assumptions

Production stripping costs

The Group capitalises mining costs incurred during the production stage of its operations in accordance with the accounting policy described above. The identification of specific components will vary between mines as a result of both the geological characteristics and location of the ore body. The financial considerations of the mining operations may also impact the identification and designation of a component.

The expected cost per tonne is a function of an individual mine’s design and therefore changes to that design will generally result in changes to the expected cost. Changes in other technical or economic parameters that impact reserves will also have an impact on the expected costs per tonne for each identified component. Changes in the expected cost per tonne are accounted for prospectively from the date of change.

15. Impairment of Non-Financial Assets

Accounting policy

At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

The recoverable amount of other assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

Impairment losses are reversed when there is an indication that the impairment loss may no longer exist and there has been a change in the estimate used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Total impairment losses recognised in the statement of comprehensive income for the year were as follows:

Consolidated	Consolidated
2018	2017
$’000	$’000
Exploration and evaluation assets 12 353	2,939

Exploration and evaluation assets

An impairment loss of $353,000 (2017: $343,000) has been recognised in relation to tenements that were surrendered, relinquished or expired during the year.

For the year ended 30 June 2017, an impairment loss of $2,596,000 was recognised for the tenements relating to the Duketon Gold Exploration Joint Venture. The Joint Venture required Regis to spend at least $1 million over a 2 year period to earn a 75% interest in any mining project that is confirmed by a Regis decision to mine. The 2 year term expired in October 2017 and no further expenditure was incurred for the year ended 30 June 2018.

46

Notes to the Financial Statements: Operating assets and liabilities | 30 June 2018

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Key judgements

Determination of mineral resources and ore reserves

The determination of mineral resources and ore reserves impacts the accounting for asset carrying values. The Group estimates its mineral resources and ore reserves in accordance with the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2012 (the “JORC” Code). The information on mineral resources and ore reserves was prepared by or under the supervision of Competent Persons as defined in the JORC Code. The amounts presented are based on the mineral resources and ore reserves determined under the JORC Code.

There are numerous uncertainties inherent in estimating mineral resources and ore reserves, and assumptions that are valid at the time of estimation may change significantly when new information becomes available.

Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and may ultimately result in reserves being restated.

16. Trade and Other Payables

Accounting Policies

Trade payables

Trade and other payables are initially recognised at the value of the invoice received from a supplier and subsequently measured at amortised cost. They represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and generally paid within 30 days of recognition.

Employee entitlements

A liability is recognised for the amount expected to be paid to an employee for annual leave they are presently entitled to as a result of past service. The liability includes allowances for on-costs such as superannuation and payroll taxes, as well as any future salary and wage increases that the employee may be reasonably entitled to.

	Consolidated	Consolidated
	2018	2017
	$’000	$’000
Current
Trade payables Accrued expenses Employee entitlements – annual leave payable Other payables	21,075 15,756 3,329 8,475	16,892 16,628 2,881 7,318
	48,635	43,719

17. Provisions

Accounting Policies

Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as a finance cost. Refer to note 18.

Site rehabilitation

In accordance with the Group’s published environmental policy and applicable legal requirements, a provision for site rehabilitation is recognised in respect of the estimated cost of rehabilitation and restoration of the areas disturbed by mining activities up to the reporting date, but not yet rehabilitated.

When the liability is initially recorded, the estimated cost is capitalised by increasing the carrying amount of the related mining assets. At each reporting date the site rehabilitation provision is re-measured to reflect any changes in discount rates and timing or amounts to be incurred. Additional disturbances or changes in rehabilitation costs will be recognised as additions or changes to the corresponding asset and rehabilitation provision, prospectively from the date of change. For closed sites, or where the carrying value of the related asset has been reduced to nil either through depreciation and amortisation or impairment, changes to estimated costs are recognised immediately in the statement of comprehensive income.

47

Notes to the Financial Statements: Operating assets and liabilities | 30 June 2018

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Long service leave

The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service up to reporting date, plus related on costs. The benefit is discounted to determine its present value and the discount rate is the yield at the reporting date on high-quality corporate bonds that have maturity dates approximating the terms of the Group’s obligations

	Consolidated	Consolidated
	2018	2017
	$’000	$’000
Current Dividends payable Long service leave Rehabilitation Non-current Long service leave Rehabilitation Provision for rehabilitation Balance at 1 July Provisions made during the year Provisions used during the year Provisions re-measured during the year Unwinding of discount Balance at 30 June	440 150 2,828	498 156 3,953
	3,418	4,607
	1,737 41,716	1,423 43,678
	43,453	45,101
	47,631 3,910 (1,145) (7,056) 1,204	37,401 12,439 (1,138) (2,110) 1,039
	44,544	47,631

Nature and purpose of provision for rehabilitation

The nature of rehabilitation activities includes dismantling and removing structures, rehabilitating mines, dismantling operating facilities, closure of plant and waste sites and restoration, reclamation and re-vegetation of affected areas. Typically, the obligation arises when the asset is installed at the production location.

Key estimates and assumptions

Rehabilitation obligations

The Group assesses site rehabilitation liabilities annually. The provision recognised is based on an assessment of the estimated cost of closure and reclamation of the areas using internal information concerning environmental issues in the exploration and previously mined areas, together with input from various environmental consultants, discounted to present value. Significant estimation is required in determining the provision for site rehabilitation as there are many factors that may affect the timing and ultimate cost to rehabilitate sites where mining and/or exploration activities have previously taken place. These factors include future development/exploration activity, changes in the cost of goods and services required for restoration activity and changes to the legal and regulatory framework. These factors may result in future actual expenditure differing from the amounts currently provided.

48

Notes to the Financial Statements: Capital structure and risk | 30 June 2018

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Capital structure, financial instruments and risk

This section outlines how the Group manages its capital, related financing costs and its exposure to various financial risks. It explains how these risks affect the Group’s financial position and performance and what the Group does to manage these risks.

The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to provide returns to shareholders and benefits for other stakeholders and to maintain an efficient capital structure to reduce the cost of capital.

The Board’s policy in relation to capital management is to regularly and consistently monitor future cash flows against expected expenditures for a rolling period of up to 12 months in advance. The Board determines the Group’s need for additional funding by way of either share issues or loan funds depending on market conditions at the time. The Board defines working capital in such circumstances as its excess liquid funds over liabilities, and defines capital as being the ordinary share capital of the Company, plus retained earnings, reserves and net debt. In order to maintain or adjust the capital structure, the Board may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or reduce debt.

There were no changes in the Group’s approach to capital management during the year.

Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

18. Net Debt and Finance Costs

Accounting Policies

Finance Leases – Group as a lessee

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership for the lease item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised as an expense in profit or loss.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.

The carrying amounts of the Group’s current and non-current borrowings approximate their fair value.

Current interest-bearing liabilities Finance lease liability Non-current interest-bearing liabilities Finance lease liability Less: cash and cash equivalents 7 Net cash	Consolidated 2018 2017 $’000 $’000 806 1,506
	36 841
	181,118 119,428
	180,276 117,081

49

Notes to the Financial Statements: Capital structure and risk | 30 June 2018

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Interest-bearing liabilities

Finance lease commitments

The Group has hire purchase contracts for three Komatsu loaders. The Group’s obligations are secured by the lessors’ title to the leased assets. Ownership of the loaders passes to the Group once all contractual payments have been made. Refer to note 26.

Finance costs Interest expense Unwinding of discount on provisions	Consolidated 2018 2017 $’000 $’000 69 126 1,204 1,039
	1,273 1,165

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (i.e. an asset that necessarily takes a substantial period of time to get ready for its intended use or sale) are capitalised as part of the cost of that asset. All other borrowing costs are expensed as part of finance costs in the period incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Unwinding of discount on provisions

The unwinding of discount on provisions represents the cost associated with the passage of time. Rehabilitation provisions are recognised at the discounted value of the present obligation to restore, dismantle and rehabilitate each mine site with the increase in the provision due to the passage of time being recognised as a finance cost in accordance with the policy described in note 17.

19. Financial Assets

Accounting Policy

Financial assets are initially recognised at fair value, plus transaction costs that are directly attributable to its acquisition and subsequently measured at amortised costs or fair value depending on the business model for those assets and the contractual cash flow characteristics.

Equity instruments

Equity instruments are normally measured at fair value through profit or loss (“FVTPL”) unless the Group chooses, on an instrument-byinstrument basis on initial recognition, to present fair value changes in other comprehensive income (“FVOCI”). This option is irrevocable and only applies to equity instruments which are neither held for trading nor are contingent consideration in a business combination. Gains and losses on equity instruments measured at FVOCI are not recycled through profit and loss or disposal and there is no impairment accounting. All gains and losses are recorded in equity through other comprehensive income.

	Consolidated
	2018	2017
	$’000	$’000
Current
Financial assets at amortised cost – term deposit	344	263

50

Notes to the Financial Statements: Capital structure and risk | 30 June 2018

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20. Financial Risk Management

The Group holds financial instruments for the following purposes:

• Financing: to raise finance for the Group’s operations or, in the case of short-term deposits, to invest surplus funds. The principal types of instruments used include bank loans, cash and short-term deposits.

• Operational: the Group’s activities generate financial instruments, including cash, receivables and trade payables.

• Risk management: to reduce risks arising from the financial instruments described above, including commodity swap contracts and gold call options.

It is, and has been throughout the year, the Group’s policy that no speculative trading in financial instruments shall be undertaken.

The Group’s holding of these financial instruments exposes it to the following risks:

• Credit risk

• Liquidity risk

• Market risk, including interest rate and commodity price risk

This note presents information about the Group’s exposure to each of the above risks and its objectives, policies and processes for measuring and managing risk. These risks affect the fair value measurements applied by the Group. Further quantitative disclosures are included throughout this financial report.

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The Audit and Risk Management Committee is responsible for developing and monitoring risk management policies. The committee reports regularly to the Board of Directors on its activities.

Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Group’s Audit and Risk Management Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

Credit Risk

Credit risk is the risk of financial loss to the Group if the counterparty to a financial asset fails to meet its contractual obligation. Credit risk arises from cash and cash equivalents and gold bullion awaiting settlement. The Group has adopted the policy of dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. Cash holdings are with Macquarie Bank Limited, an Australian bank regulated by APRA and with a short term S&P rating of A-1. The Group has determined that it currently has no significant exposure to credit risk as at reporting date given banks have investment grade credit ratings.

Liquidity Risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk damage to the Group’s reputation.

The Group uses weekly and monthly cash forecasting to monitor cash flow requirements. Typically the Group ensures that it has sufficient cash on demand to meet expected operational expenses, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

The following table analyses the Group’s financial liabilities, including net and gross settled financial instruments, into relevant maturity periods based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows and hence will not necessarily reconcile with the amounts disclosed in the balance sheet.

For derivative liabilities (sold gold call options), the amounts disclosed are the net amounts that would need to be paid if the option expired out of the money. Due to their short term nature, the amounts have been estimated using the gold spot price applicable at reporting date.

51

Notes to the Financial Statements: Capital structure and risk | 30 June 2018

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30 June 2018	Carrying	Contractual					More than 5
($’000)	amount	cash-flows	6 mths or less	6-12 mths	1-2years	2-5years	years
Trade and other payables Finance leases Total	45,306 842	(45,306) (856)	(45,306) (428)	- (392)	- (36)	- -	- -
	46,148	(46,162)	(45,734)	(392)	(36)	-	-
30 June 2017	Carrying	Contractual					More than 5
($’000)	amount	cash-flows	6 mths or less	6-12 mths	1-2years	2-5years	years
Trade and other payables Derivative liabilities Finance lease Total	40,764 102 2,347	(40,764) (102) (2,414)	(40,764) (102) (811)	- - (747)	- - (820)	- - (36)	- - -
	43,213	(43,280)	(41,677)	(747)	(820)	(36)	-

Assets pledged as security

The finance lease liabilities are secured by the related assets. Ownership of the assets remains with Komatsu until all contractual payments have been made.

Financial guarantee liabilities

As at 30 June 2018, the Group did not have any financial guarantee liabilities (2017: Nil).

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, commodity prices and equity prices will affect the Group’s income or value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

• Foreign currency risk: The Group is occasionally exposed to foreign currency risk when long lead items are purchased in a currency other than Australian dollars. The Group maintains all of its cash in Australian dollars and does not currently hedge these purchases. There is no significant exposure to foreign currency risk at reporting date.

• Interest rate risk: Since repayment of substantially all of the principal outstanding on the secured project loan facility with Macquarie Bank Limited (“MBL”) during the current year, the Group is only exposed to interest rate risk through its cash deposits, which attract variable interest rates. The Group regularly reviews its current working capital requirements against cash balances and the returns available on short term deposits. There is no significant exposure to interest rate risk at reporting date.

• Commodity price risk: The Group’s exposure to commodity price risk is purely operational and arises largely from gold price fluctuations or in relation to the purchase of inventory with commodity price as a significant input, such as diesel. The Group’s exposure to movements in the gold price is managed through the use of gold forward contracts (note 2) and sold call options (note 20). The gold forward sale contracts do not meet the criteria of financial instruments for accounting purposes on the basis that they meet the normal purchase/sale exemption because physical gold will be delivered into the contract. No sensitivity analysis is provided for these contracts as they are outside the scope of AASB 9 Financial Instruments (2014) . The sold call options are classified as derivative financial instruments at fair value through profit or loss.

The Group continued a medium term risk management strategy during the prior year to take advantage of historically low oil prices by entering into commodity swap transactions on gasoil to hedge exposure to movements in the Australian dollar price of diesel. Regis considers the gasoil component to be a separately identifiable and measurable component of diesel. During the 2018 financial year this hedge arrangement fixed a significant proportion (approximately two thirds) of the total estimated annual diesel usage at the Group’s Duketon operations.

52

Notes to the Financial Statements: Capital structure and risk | 30 June 2018

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Interest rate risk

At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:

Fixed rate instruments Term deposits Finance lease liabilities Variable rate instruments Cash and cash equivalents	Consolidated 2018 2017 $’000 $’000 344 50,263 (842) (2,347)
	(498) 47,916
	180,854 69,167

Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change at reporting date would not affect profit or loss.

Cash flow sensitivity analysis for variable rate instruments

A sensitivity analysis has not been disclosed in relation to the variable interest rate cash on deposit and secured bank loan as the results have been determined to be immaterial to the statement of comprehensive income for both the current and prior financial years.

Fair Values

The carrying amounts and estimated fair values of all of the Group’s financial instruments recognised in the financial statements are materially the same. The methods and assumptions used to estimate the fair value of the financial instruments are disclosed in the respective notes.

Valuation of financial instruments

For all fair value measurements and disclosures, the Group uses the following to categorise the method used:

• Level 1: the fair value is calculated using quoted prices in active markets.

• Level 2: the fair value is estimated using inputs other than quoted prices included in Level 1, that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices). The Group’s derivative liabilities (sold gold call options) and derivative assets (cash flow hedges) are classified as Level 2, as they were valued using valuation techniques that employ the use of market observable inputs. The most frequently applied valuation techniques include forward pricing and swap models using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, and spot and forward rate curves of the underlying commodity. The changes in counterparty credit risk had no material effect on the hedge effectiveness assessment for the commodity swaps designated in hedge relationships and the sold gold call options recognised at fair value.

• Level 3: the fair value is estimated using inputs for the asset or liability that are not based on observable market data. The Group does not have any financial assets or liabilities in this category.

For financial instruments that are carried at fair value on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. There were no transfers between levels during the year.

53

Notes to the Financial Statements: Capital structure and risk | 30 June 2018

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21. Issued Capital and Reserves

Accounting Policy

Ordinary shares are classified as equity. Transaction costs directly attributable to the issue of shares or options are recognised as a deduction from equity, net of any related income tax effects.

	Consolidated	Consolidated
	2018	2017
	$’000	$’000
Ordinary shares – issued and fully paid Movement in ordinary shares on issue At 1 July 2016 Issued on exercise of options Transaction costs At 30 June 2017 Issued on exercise of options Transaction costs At 30 June 2018	433,248	431,491
	No. shares
	(‘000s)	$’000
	499,854 1,166 -	431,335 175 (19)
	501,020	431,491
	3,418 -	1,810 (53)
	504,438	433,248

The holders of ordinary shares are entitled to receive dividends as declared from time to time and, on a poll, are entitled to one vote per share at meetings of the Company. The Company does not have authorised capital or par value in respect of its issued shares.

	Share-based	Financial assets Cash flow hedge
	payment reserve	reserve reserve	Total Reserves
	$’000	$’000 $’000	$’000
Balance at 1 July 2016 Net gain on financial instruments recognised in equity Tax effect of transfers and revaluations Share-based payment transactions Balance at 30 June 2017 and 1 July 2017 Net gain on financial instruments recognised in equity Tax effect of transfers and revaluations Share-based payment transactions Balance at 30 June 2018	21,827 - - 3,222	3,243 3,504 (2,180) (4,818) 654 1,424 - -	28,574 (6,998) 2,078 3,222
	25,049 - - 3,231	1,717 110 - (188) - 78 - -	26,876 (188) 78 3,231
	28,280	1,717 -	29,997

Nature and purpose of reserves

Share-based payment reserve

The share-based payment reserve is used to record the value of share-based payments and performance rights provided to employees, including KMP, as part of their remuneration, as well as non-employees.

Financial assets reserve

The financial assets reserve records fair value changes on financial assets designated at fair-value through other comprehensive income.

Cash flow hedge reserve

The hedging reserve records the portion of the gain or loss on a hedging instrument in a cash flow hedge that is determined to be an effective hedge relationship.

54

Notes to the Financial Statements: Other disclosures | 30 June 2018

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Other disclosures

This section provides information on items which require disclosure to comply with Australian Accounting Standards and other regulatory pronouncements.

22. Deferred Income Tax

Accounting Policy

Deferred tax balances are determined using the balance sheet method, which provides for temporary differences at the balance sheet date between accounting carrying amounts and the tax bases of assets and liabilities.

Deferred income tax liabilities are recognised for all taxable temporary differences, other than for the exemptions permitted under accounting standards. At 30 June 2018 there are no unrecognised temporary differences associated with the Group’s investment in subsidiaries (2017: $nil).

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that future taxable profits will be available to utilise these deductible temporary differences. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are only offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

Deferred income tax at 30 June relates to the following:

Deferred tax liabilities Receivables Inventories Prepayments Financial assets Property, plant and equipment Exploration and evaluation expenditure Mine properties under development Mine properties Gross deferred tax liabilities Set off of deferred tax assets Net deferred tax liabilities Deferred tax assets Trade and other payables Provisions Expenses deductible over time Derivatives Tax losses carried forward Gross deferred tax assets Set off of deferred tax assets Net deferred tax assets	Consolidated 2018 2017 $’000 $’000 3,219 2,389 4,594 469 111 74 - 78 14,199 10,083 28,615 22,529 8,873 - 37,235 36,973
	96,846 72,595 (21,748) (23,192)
	75,098 49,403
	1,114 940 13,929 14,763 3 8 - 31 6,702 7,450
	21,748 23,192 (21,748) (23,192)
	- -

55

Notes to the Financial Statements: Other disclosures | 30 June 2018

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Reconciliation of deferred tax, net: Opening balance at 1 July – net deferred tax assets/(liabilities) Income tax (expense)/ benefit recognised in profit or loss Income tax (expense)/benefit recognised in equity Closing balance at 30 June – net deferred tax (liabilities)/ assets	Consolidated 2018 2017 $’000 $’000 (49,403) (20,806) (25,773) (31,411) 78 2,814
	(75,098) (49,403)

Key judgements

Recovery of deferred tax assets

Judgement is required in determining whether deferred tax assets are recognised on the balance sheet. Deferred tax assets, including those arising from unutilised tax losses, require management to assess the likelihood that the Group will generate taxable earnings in future periods, in order to utilise recognised deferred tax assets. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in Australia.

To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Group to realise the net deferred tax assets recorded at the reporting date could be impacted. Additionally, future changes in tax laws in Australia could limit the ability of the Group to obtain tax deductions in future periods.

Tax consolidation

The Company and its wholly-owned Australian resident entities became part of a tax-consolidated group on 14 December 2006. As a consequence, all members of the tax-consolidation group are taxed as a single entity from that date. The head entity within the taxconsolidation group is Regis Resources Limited.

The head entity, in conjunction with other members of the tax-consolidated group, have entered into a tax funding arrangement which sets out the funding obligations of members of the tax-consolidated group in respect of tax amounts. Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the subsidiaries are assumed by the head entity and are recognised by the Company as intercompany receivables (or payables). Contributions to fund the current tax liabilities are payable as per the tax funding arrangement and reflect the timing of the head entity’s obligation to make payments for tax liabilities to the relevant tax authorities.

The Company recognises deferred tax assets arising from unused tax losses of the tax-consolidated group to the extent that it is probable that future taxable profits of the tax-consolidated group will be available against which asset can be utilised.

Any subsequent period adjustment to deferred tax assets arising from unused tax losses as a result of revised assessments of the probability of recoverability is recognised by the head entity only.

The head entity in conjunction with other members of the tax-consolidated group has also entered into a tax sharing agreement. The tax sharing agreement provides for the determination of the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. No amounts have been recognised in the financial statements in respect of this agreement as payment of any amounts under the tax sharing agreement is considered remote.

56

Notes to the Financial Statements: Other disclosures | 30 June 2018

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23. Share-based Payments

Accounting Policy

The value of options granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the options (the vesting period), ending on the date on which the relevant employees become fully entitled to the option (the vesting date).

At each subsequent reporting date until vesting, the cumulative charge to the statement of comprehensive income is the product of:

• The grant date fair value of the option;

• The current best estimate of the number of options that will vest, taking into account such factors as the likelihood of employee turnover during the vesting period and the likelihood of non-market performance conditions being met; and

• The expired portion of the vesting period.

Until an option has vested, any amounts recorded are contingent and will be adjusted if more or fewer awards vest than were originally anticipated to do so.

	Consolidated	Consolidated
	2018	2017
	$’000	$’000
Recognised share-based payments expense Employee share-based payments expense Performance rights expense Total expense arising from share-based payment transactions	2,575 656	2,928 294
	3,231	3,222

There have been no cancellations or modifications to any of the plans during the current or prior years.

Employee share option plan (ESOP)

The Company has one ESOP, being the Regis Resources Limited 2014 Share Option Plan (the “Option Plan”). The objective of the Option Plan is to assist in the recruitment, reward, retention and motivation of eligible persons of the Group. Under the Option Plan, the board or Remuneration, Nomination and Diversity Committee may issue eligible employees with options to acquire shares in the future at an exercise price fixed by the board or Remuneration, Nomination and Diversity Committee on grant of the options.

The vesting of all options is subject to service conditions being met whereby the recipient must meet the eligible employee criteria as defined in the Option Plan.

Summary of options granted

The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of, and movements in, share options issued during the year:

2018 No. WAEP Outstanding at the beginning of the year 9,445,000 $1.5274 Granted during the year 1,790,000 $3.9000 Forfeited during the year (747,500) $2.3632 Exercised during the year (4,665,000) $1.5294 Expired during the year - - Outstanding at the end of the year 5,822,500 $2.1480 Exercisable at the end of the year 70,000 $1.4000 Weighted average share price at the date of exercise Weighted average remaining contractual life Range of exercise prices Weighted average fair value of options granted during the year	2018	2018	2017	2017
	No.	WAEP	No.	WAEP
	9,445,000 1,790,000 (747,500) (4,665,000) -	$1.5274 $3.9000 $2.3632 $1.5294 -	13,160,000 - (1,035,000) (2,680,000) -	$1.7125 - $1.7570 $2.3473 -
	5,822,500	$2.1480	9,445,000	$1.5274
		$1.4000	-	-
			2018	2017
			$4.19 1.7 years $1.40 - $3.90 $1.5709	$3.85 2.2 years $1.40 - $2.70 n/a

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Notes to the Financial Statements: Other disclosures | 30 June 2018

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Option pricing model

The fair value of the equity-settled share options granted under the ESOP is estimated as at the date of grant using a Black-Scholes option pricing model taking into account the terms and conditions upon which the options were granted. There were no new grants of employee options during the year ended 30 June 2017. The following table lists the inputs to the model used for the year ended 30 June 2018:

options during the year ended 30 June 2017. The following table lists the inputs to the model used for the year ended	30 June 2018:
Dividend yield (%) Expected volatility (%) Risk free interest rate (%) Expected life of the option (years) Option exercise price ($) Weighted average share price at grant date ($)	2018 ESOP
	4.00 73.12 – 93.74 1.74 – 1.90 2 – 3 years 3.90 3.75

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.

Performance Rights

In November 2016, 401,999 performance rights were granted to the executive directors, Mr Mark Clark and Mr Paul Thomas, and other executives, Mr Kim Massey and Mr Peter Woodman under the Group’s Executive Incentive Plan (“EIP”).

Mr Peter Woodman resigned on 29 March 2018, 69,333 performance rights granted to Mr Woodman lapsed upon the date of the resignation in accordance with the terms and conditions.

The performance conditions that the Board has determined will apply to the Performance Rights are summarised below:

Tranche	Weighting Performance Conditions
Tranche A	25% of the Performance Rights The Company’s relative total shareholder return (“TSR”) measured against the TSR’s of
	18 comparator mining companies
Tranche B	25% of the Performance Rights The Company’s absolute TSR measured against specific thresholds
Tranche C	25% of the Performance Rights The growth in the Company’s earnings per share (“EPS”) measured against specific
	thresholds
Tranche D	25% of the Performance Rights The growth in the Company’s Ore Reserve measured against specific thresholds

The fair value at grant date of Tranches A and B was estimated using a Monte Carlo simulation, and a Black Scholes option pricing model was used to estimate the fair value at grant date of Tranches C and D.

The table below details the terms and conditions of the grant and the assumptions used in estimating fair value:

Item	Tranche A & B	Tranche C & D
Grant date	18 November 2016	18 November 2016
Value of the underlying security at grant date	$2.740	$2.740
Exercise price	nil	nil
Dividend yield	4.23%	4.23%
Risk free rate	1.75%	1.75%
Volatility	60%	60%
Performance period (years)	2	2
Commencement of measurement period	1 July 2016	1 July 2016
Test date	30 June 2018	30 June 2018
Remaining performance period (years)	nil	nil

The weighted average fair value of the Performance Rights granted during the year was $1.90.

In November 2017, 430,440 performance rights were granted to the executive directors, Mr Mark Clark and Mr Paul Thomas, and other executives, Mr Kim Massey and Mr Peter Woodman under the Group’s Executive Incentive Plan (“EIP”).

Mr Peter Woodman resigned on 29 March 2018, 71,625 performance rights granted to Mr Woodman lapsed upon the date of the resignation in accordance with the terms and conditions.

The performance conditions that the Board has determined will apply to the Performance Rights are summarised below:

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Notes to the Financial Statements: Other disclosures | 30 June 2018

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Tranche	Weighting Performance Conditions
Tranche A	25% of the Performance Rights The Company’s relative total shareholder return (“TSR”) measured against the TSR’s of
	18 comparator mining companies
Tranche B	25% of the Performance Rights The Company’s absolute TSR measured against specific thresholds
Tranche C	25% of the Performance Rights The growth in the Company’s earnings per share (“EPS”) measured against specific
	thresholds
Tranche D	25% of the Performance Rights The growth in the Company’s Ore Reserve measured against specific thresholds

The fair value at grant date of Tranches A and B was estimated using a Monte Carlo simulation, and a Black Scholes option pricing model was used to estimate the fair value at grant date of Tranches C and D.

The table below details the terms and conditions of the grant and the assumptions used in estimating fair value:

Item	Tranche A & B	Tranche C & D
Grant date	23 November 2017	23 November 2017
Value of the underlying security at grant date	$4.090	$4.090
Exercise price	nil	nil
Dividend yield	4.00%	4.00%
Risk free rate	1.90%	1.90%
Volatility	50%	50%
Performance period (years)	3	3
Commencement of measurement period	1 July 2017	1 July 2017
Test date	30 June 2020	30 June 2020
Remaining performance period (years)	2.6	2.6

The weighted average fair value of the Performance Rights granted during the year was $2.98.

Key estimates and assumptions Share-based payments The Group is required to use key assumptions, such as volatility, in respect of the fair value models used in determining share-based payments to employees in accordance with the requirements of AASB 2 Share–based payment. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and equity.

24. Related Parties

Key management personnel compensation

The key management personnel compensation included in employee benefits expense (note 3) and share-based payments (note 23), is as follows:

	Consolidated	Consolidated
	2018	2017
	$	$
Short-term employee benefits Post-employment benefits Long-term benefits Termination benefits Share-based payment Total compensation	3,100,580 157,062 190,062 5,619 1,391,477	2,802,104 159,410 212,867 - 2,030,994
	4,844,800	5,205,375

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Notes to the Financial Statements: Other disclosures | 30 June 2018

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Individual directors and executives compensation disclosures

Information regarding individual directors’ and executives’ compensation and equity instrument disclosures required by s300A of the Corporations Act and Corporations Regulations 2M.3.03 are provided in the Remuneration Report section of the Directors’ Report.

No director has entered into a material contract with the Group either in the current or prior financial year and there were no material contracts involving directors’ interests existing at year end, other than advised elsewhere in this report.

Subsidiaries

The consolidated financial statements include the financial statements of Regis Resources Limited and the subsidiaries listed in the following table:

		% EquityInterest	% EquityInterest	Investment$’000	Investment$’000
	Country of
Name	Incorporation	2018	2017	2018	2017
Duketon Resources Pty Ltd Artane Minerals NL Rosemont Gold Mines Pty Ltd LFB Resources NL Greenflow Pty Ltd	Australia Australia Australia Australia Australia	100% 100% 100% 100% 100%	100% 100% 100% 100% 100%	30,575 - - 44,110 -	30,575 - - 44,110 -
				74,685	74,685

Ultimate parent

Regis Resources Limited is the ultimate Australian parent entity and the ultimate parent entity of the Group.

Transactions with related parties

A loan is made by the Company to Duketon Resources and represents the subsidiary’s share of payments for exploration and evaluation expenditure on commercial joint ventures existing between the Company and Duketon Resources. The loan outstanding between the Company and Duketon Resources has no fixed date of repayment and is non-interest-bearing. As at 30 June 2018, the balance of the loan receivable was $25,971,000 (2017: $24,157,000).

A loan is made by the Company to LFB Resources and represents the subsidiary’s share of payments for exploration and evaluation expenditure. The loan outstanding between the Company and LFB Resources has no fixed date of repayment and is non-interest-bearing. As at 30 June 2018, the balance of the loan receivable was $63,945,000 (2017: $38,775,000).

Transactions with key management personnel

For the year ended 30 June 2018, services totalling $645,073 (2017: $335,302) have been provided on normal commercial terms to the Group by Mintrex Pty Ltd, of which Mrs Morgan is a Managing Director, Chief Executive Officer and a shareholder. The Company engaged Mintrex during the financial year to engineer preliminary plant designs for the McPhillamys Project. Mrs Morgan and Mintrex have structured their management of this engineering project to ensure she has no involvement in the control or direction of the work. The balance outstanding at 30 June was $30,249, exclusive of GST.

Other than the ordinary accrual of personnel expenses at balance date and transactions disclosed above, there are no other amounts receivable from and payable to key management personnel and their related parties.

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Notes to the Financial Statements: Other disclosures | 30 June 2018

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25. Parent Entity Information

The following details information related to the parent entity, Regis Resources Limited, at 30 June 2018. The information presented here has been prepared using consistent accounting policies as detailed in the relevant notes of this report.

Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Issued capital Share-based payment reserve Retained profits Total equity Net profit for the year Other comprehensive income for the period Total comprehensive income for the period	2018 2017 $’000 $’000 252,892 190,919 585,459 518,194
	838,351 709,113
	66,865 51,984 101,674 85,933
	168,539 137,917
	433,248 431,491 29,997 26,876 206,567 112,829
	669,812 571,196
	174,396 138,503 (110) (4,920)
	174,286 133,583

The parent entity has not guaranteed any loans of its subsidiaries.

There are no contingent assets or liabilities of the Group or parent entity at 30 June 2018 as disclosed at note 27.

All commitments are commitments incurred by the parent entity, except for $744,000 (2017: $1,351,000) of the exploration expenditure commitments disclosed at note 12, and $201,000 (2017: $35,000) of the operating lease commitments disclosed at note 26.

26. Commitments

Operating lease commitments – Group as lessee

The Group leases office premises in Perth, WA and Blayney, NSW under normal commercial lease arrangements. The Perth office lease was entered into for an initial period of 5 years beginning 1 May 2010 and was renewed for a further 5 year period in 2016. The Group is under no legal obligation to renew the lease once the extended lease term has expired.

During the year, two new office leases were entered into for Blayney, NSW, for an initial period of 3 years each, effective 1 November 2017.

On 1 June 2018, the Group signed a new lease contract for the Perth office for initial period of 3 years. During this period, the current Perth office lease will be sublet subject to negotiation with the potential lessee.

Future minimum rentals payable under non-cancellable operating leases at 30 June are as follows:

	Consolidated	Consolidated
	2018	2017
	$’000	$’000
Within one year Between one and five years Total minimum lease payments	1,027 1,529	373 683
	2,556	1,056

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Notes to the Financial Statements: Other disclosures | 30 June 2018

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Finance lease commitments - Group as lessee

The Group has entered into hire purchase contracts for the purchase of two Komatsu loaders. The contracts expire on 27 May 2019 and 4 July 2019 and ownership of the loaders passes to the Group once all contractual payments have been made. (30 June 2017: 29 May 2018, 27 May 2019 and 4 July 2019).

	Consolidated	Consolidated
	2018	2017
	$’000	$’000
Within one year Between one and five years Total minimum lease payments Less amounts representing finance charges Present value of minimum lease payments Included in the financial statements as: Current interest-bearing liabilities Non-current interest-bearing liabilities Carrying value of leased assets included in plant and equipment 11	821 36	1,558 856
	857 (15)	2,414 (67)
	842	2,347
	806 36	1,506 841
	842	2,347
	1,132	3,425

Contractual commitments

On 19 January 2010, the Group entered into an agreement with Pacific Energy (KPS) Pty Ltd (“KPS”) for the supply of electricity to the Moolart Well Gold Mine. The terms of this agreement commit the Group to purchasing a fixed amount of electricity per month for six years from 7 July 2010 (the “Effective Date”) at a price which will be reviewed annually. The agreement has been renewed for further 4 years, effective 1 September 2017. As at 30 June 2018, the Group had $3,507,000 commitments to purchase electricity (30 June 2017: nil).

On 23 June 2011, the Group entered into an agreement with Pacific Energy (KPS) Pty Ltd (“KPS”) for the supply of electricity to the Garden Well Gold Mine. The terms of this agreement commit the Group to purchasing a fixed amount of electricity per month for 5 years from 1 September 2012 (the “Effective Date”) at a price which will be reviewed annually. The agreement was amended, effective 1 October 2013, to incorporate Rosemont Gold Mine’s power requirements. On 1 September 2017, he agreement was renewed for further 3 years. As at 30 June 2018, at the current contract price, the Group had commitments to purchase electricity for the remaining term of $11,330,000 (30 June 2017: $762,000).

27. Contingencies

As at 30 June 2018, the Group did not have any contingent assets or liabilities (30 June 2017: nil).

28. Auditor’s Remuneration

	Consolidated
	2018 2017
	$ $
Audit services KPMG Australia Audit and review of financial statements Other services Other advisory services Taxation compliance services Total auditor’s remuneration	237,408 217,299 13,581 15,888 33,700 6,509
	284,689 239,696

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Notes to the Financial Statements: Other disclosures | 30 June 2018

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29. Subsequent Events

Share issue

Subsequent to year end, 425,133 shares have been issued as a result of the exercise of employee options for proceeds of $35,000.

Dividends

On 27 August 2018, the directors proposed a final dividend on ordinary shares in respect of the 2018 financial year. Refer to note 6.

Other than the matters discussed above, there has not arisen in the interval between the end of the financial year and the date of this Report any item, transaction or event of a material and unusual nature which, in the opinion of the directors of the Group, has significantly affected or is likely to significantly affect the operations of the Group; the results of those operations; or the state of affairs of the Group in future financial years.

30. New Accounting Standards and Interpretations

Changes in accounting policy

The Group has adopted the following new and revised accounting standards, amendments and interpretations as of 1 July 2017:

- AASB 2016-1 Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for Unrealised Losses

• AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107

The adoption of these new and revised standards did not have a material impact on the Group’s financial statements.

New standards and interpretations issued but not yet effective

The following standards, amendments to standards and interpretations have been identified as those which may impact the entity in the period of initial application. They are available for early adoption at 30 June 2018 but have not been applied in preparing this financial report. Except where noted, the Group has evaluated the impact of the new standards and interpretations listed below and determined that the changes are not likely to have a material impact on its financial statements.

AASB 15 Revenue from Contracts with Customers

AASB 15 replaces all existing revenue requirements in Australian Accounting Standards (AASB 111 Construction Contracts , AASB 118 Revenue , AASB Interpretation 13 Customer Loyalty Programmes , AASB Interpretation 15 Agreements for the Construction of Real Estate , AASB Interpretation 18 Transfers of Assets from Customers and AASB Interpretation 131 Revenue – Barter Transactions Involving Advertising Services) and applies to all revenue arising from contracts with customers, unless the contracts are in the scope of other standards, such as AASB 117 (or AASB 16 Leases , once applied).

AASB 15 establishes a five step model to account for revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Under AASB 15 the revenue recognition model will change from one based on the transfer of risk and reward of ownership to the transfer of control of ownership.

The Group has assessed the effects of applying the new standard and on the recognition of revenue recognised from gold sales. The Group have concluded that there is no material impact in the amount of revenue recognised from gold sales following the transition to AASB15. It is not expected that significant changes to disclosures will be required.

Application date of Standard:

1 January 2018* Application date for Group: 1 July 2018

*Early application is permitted.

AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint

Venture

The amendments clarify that a full gain or loss is recognised when a transfer to an associate or joint venture involves a business as defined in AASB 3 Business Combinations . Any gain or loss resulting from the sale or contribution of assets that does not constitute a business, however, is recognised only to the extent of unrelated investors’ interests in the associate or joint venture.

AASB 2015-10 defers the mandatory effective date (application date) of AASB 2014-10 so that the amendments are required to be applied for annual reporting periods beginning on or after 1 January 2022 instead of 1 January 2018.

Application date of Standard: 1 January 2022

Application date for Group:

1 July 2022

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Notes to the Financial Statements: Other disclosures | 30 June 2018

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AASB 2016-5 Amendments to Australian Accounting Standards – Classification and Measurement of Share-based Payment Transactions This standard amends AASB 2 Share-based Payment , clarifying how to account for certain types of share-based payment transactions. The amendments provide requirements on the accounting for:

• The effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments

• Share-based payment transactions with a net settlement feature for withholding tax obligations

• A modification to the terms and conditions of a share-based payment that changes the classification of the transaction from cash-settled to equity-settled.

Application date of Standard:

1 January 2018

Application date for Group: 1 July 2018

AASB 16 Leases

AASB 16 requires lessees to account for all leases under a single on-balance sheet model in a similar way to finance leases under AASB 117 Leases . The standard includes two recognition exemptions for lessees – leases of ‘low-value’ assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-ofuse asset).

Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset.

Lessees will be required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the re-measurement of the lease liability as an adjustment to the right-of-use asset.

Lessor accounting is substantially unchanged from today’s accounting under AASB 117. Lessors will continue to classify all leases using the same classification principle as in AASB 117 and distinguish between two types of leases: operating and finance leases.

The standard will primarily affect the accounting for the Group’s operating leases. As at the reporting date, the Group has non-cancellable operating lease commitments of $2.6 million, see note 26. To date, work has focussed on the identification of the provisions of the standard which will most impact the Group. In the year ended 30 June 2019, work on the issues and their resolution will continue including a detailed review of contracts, in particular, the Company’s mining services and haulage contracts and their financial reporting impacts.

Some of these commitments may be covered by the exception for short-term and low-value leases and some commitments may relate to arrangements that will not qualify as leases under AASB 16. Given the Group’s current level of exposure, the impact of adoption of AASB 16 on the financial statements is not expected to be material.

Application date of Standard: 1 January 2019 Application date for Group: 1 July 2019

IFRIC 23 Uncertainty over Income Tax Treatments

The Interpretation clarifies the application of the recognition and measurement criteria in IAS 12 Income Taxes when there is uncertainty over income tax treatments. The Interpretation specifically addresses the following:

• Whether an entity considers uncertain tax treatments separately.

• The assumptions an entity makes about the examination of tax treatment by taxation authorities.

• How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates.

• How an entity considers changes in facts and circumstances.

Application date of Standard: 1 January 2019

Application date for Group: 1 July 2019

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DIRECTORS’ DECLARATION

In accordance with a resolution of the directors of Regis Resources Limited, I state that:

1. In the opinion of the directors:

2. (a) The financial statements, notes and additional disclosures included in the directors’ report designated as audited, of the Company and the consolidated entity are in accordance with the Corporations Act 2001 , including:

   • (i) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2018 and of its performance for the financial year ended on that date; and

   • (ii) Complying with Accounting Standards and the Corporations Regulations 2001 ; and

3. (b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

4. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2018.

5. The directors draw attention to the notes to the consolidated financial statements, which include a statement of compliance with International Financial Reporting Standards.

On behalf of the board

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Mr Mark Clark Executive Chairman

Perth, 27 August 2018

65

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Independent Auditor’s Report

To the shareholders of Regis Resources Limited

Report on the audit of the Financial Report

Opinion

We have audited the Financial Report of Regis Resources Limited.

In our opinion, the accompanying Financial Report of Regis Resources Limited is in accordance with the Corporations Act 2001 , including

• giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its financial performance for the year ended on that date; and

• complying with Australian Accounting Standards and the Corporations Regulations 2001 .

The Financial Report comprises the:

• Consolidated Balance Sheet as at 30 June 2018

• Consolidated Statement of Comprehensive Income, Consolidated Statement of Changes in Equity and Consolidated Statement of Cash Flows for the year then ended

• Notes including a summary of significant accounting policies

• Directors’ Declaration.

The Group consists of Regis Resources Limited (the Company) and the entities it controlled at the year end and from time to time during the financial year.

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards . We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report.

We are independent of the Company in accordance with the Corporations Act 2001 and the relevant ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code). We have fulfilled our other ethical responsibilities in accordance with the Code.

Key Audit Matters

The Key Audit Matters we identified are:

• Valuation and classification of low grade ore stockpiles

• Valuation of exploration and evaluation assets

Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Report of the current period.

• These matters were addressed in the context of our audit of the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under Profession Standards Legislation.

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Valuation and classification of low grade ore stockpiles AU $45,986 thousand

Refer to Note 10 to the financial report

The key audit matter

How the matter was addressed in our audit

Significant judgment is required to be exercised by management in assessing the value and classification of low grade ore stockpiles which will be used to produce gold bullion in the future. The valuation and classification of low grade ore stockpiles is a key audit matter because:

• Additional low grade stockpiles have been created from the continuation of mining activities; and

• Significant judgment is required by us in evaluating and challenging the Group’s assessment.

The Group’s assessment is based on a model which estimates future revenue expected to be derived from gold contained in the low grade ore stockpiles, less selling costs and future processing costs to convert stockpiles into gold bullion. We placed particular focus on those judgments listed below which impact the valuation and classification of ore stockpiles:

• Forecast processing costs of low grade ore stockpiles.

• Forecast quantity of gold contained within the low grade ore stockpiles.

• • Future commodity prices expected to prevail when the gold from existing low grade ore stockpiles is processed and sold.

For this key audit matter, our procedures included:

• Testing the Group’s key controls around inventory reconciliations which utilise underlying data such as production and processing costs, geological survey reports, mill production reports and metallurgical survey reports.

• Assessing the methodology and key assumptions in the Group’s model used to determine the value of low grade ore stockpiles by:

  • comparing forecast processing costs to previous actual costs, and for consistency with management’s latest life of mine plan

  • comparing forecast quantity of gold contained within stockpiles to management’s geological survey results and historical trends

  • comparing commodity prices to published external analysts’ data for prices expected to prevail in the future

• Critically evaluating the Group’s classification of low grade ore stockpiles as current/non-current by assessing the estimated timing of processing the stockpiles against the Group’s latest life of mine plan and the historical operating capacity of the Group’s processing plants.

• Estimated timing of conversion of low grade ore stockpiles into gold bullion, which drives the classification of low grade ore stockpiles as current or non-current assets.

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Valuation of exploration and evaluation (“E&E”) assets AU $171,570 thousand

Refer to Note 12 to the financial report

The key audit matter The valuation of E&E assets is a key audit matter due to:

• the significance of the E&E balance (being 21% of the Group’s total assets); and

• • the greater level of audit effort to evaluate the Group’s application of the requirements of the industry specific accounting standard AASB 6 Exploration for and Evaluation of Mineral Resources, in particular the presence of impairment indicators. The presence of impairment indicators would necessitate a detailed analysis by the Group of the value of E&E, therefore given the criticality of this to the scope and depth of our work, we involved senior team members to challenge the Group’s determination that no such indicators existed.

In assessing the presence of impairment indicators, we focused on those that may draw into question the commercial continuation of E&E activities for areas of interest within the Duketon region of WA as well as the McPhillamys project of NSW where significant capitalised E&E exists. In performing the assessments above, we paid particular attention to:

How the matter was addressed in our audit Our audit procedures included:

• We tested the Group’s compliance with minimum expenditure requirements for a sample of exploration licenses

• • We obtained corporate budgets which we compared for consistency to areas of interest with capitalised E&E, for evidence of the ability to fund the continuation of activities

• • We compared the documentation from the sources listed below for information regarding the results of activities, the potential for commercially viable quantities of reserves to exist and for the Group’s intentions to continue activities in relation to certain areas of interest. We corroborated this through interviews of key operational and finance personnel

  • Internal management plans

  • Minutes of board meetings

  • Reports lodged with relevant government authorities

  • o Announcements made by the Group to the ASX

• The Group’s compliance with key license conditions to maintain current rights to tenure for an area of interest, particularly minimum expenditure requirements

• The ability of the Group to fund the continuation of activities for all areas of interest

• Results from latest activities regarding the potential for a commercially viable quantity of reserves and the Group’s intention to continue E&E activities in each area of interest as a result.

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Other Information

Other Information is financial and non-financial information in Regis Resources Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information.

The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’ Report. The remaining Other Information, which includes the Chairman’s Report, Corporate, Duketon Gold Project, Gold Exploration, Gold Reserves & Resources and Additional ASX information is expected to be made available to us after the date of the Auditor's Report.

Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will not express any form of assurance conclusion thereon, with the exception of the Remuneration Report.

In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report.

Responsibilities of Directors for the Financial Report

The Directors are responsible for:

• preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 ;

• implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and

• assessing the Group’s ability to continue as a going concern. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the Financial Report

Our objective is:

• to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and

• to issue an Auditor’s Report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report.

A further description of our responsibilities for the Audit of the Financial Report is located at the Auditing and Assurance Standards Board website at:

http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our Auditor’s Report.

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Report on the Remuneration Report

Opinion

In our opinion, the Remuneration Report of Regis Resources Limited for the year ended 30 June 2018, complies with Section 300A of the Corporations Act 2001 .

Director’s responsibilities

The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001 .

Our responsibilities

We have audited the Remuneration Report included in the Director’s report for the year ended 30 June 2018.

Our responsibility is to express an opinion on the Remuneration Report, based on our Audit conducted in accordance with Australian Auditing Standards .

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KPMG

R Gambitta Partner

Perth

27 August 2018