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On Friday, JPMorgan initiated coverage on Regis Resources Ltd . (ASX:RRL:AU) (OTC:RGRNF), assigning an Overweight rating and setting a price target of AUD5.60. The firm’s analysis highlighted Regis Resources’ operations at the Duketon Gold Project in Western Australia and its 30% interest in the Tropicana Gold mine, with the remaining 70% owned by AngloGold Ashanti.
Regis Resources also holds ownership of the McPhillamys Gold Project located in New South Wales. A definitive feasibility study for this project was released in July 2024 but was paused due to a decision by the Federal government. This interruption has led to a period of reduced production for the company.
Despite the production decline, JPMorgan pointed to Regis Resources’ strong cash flow prospects, forecasting an average free cash flow yield of 15% over the next five years. This financial position is expected to provide the company with various capital management options, which could include inorganic growth. Such opportunities present both potential rewards and risks.
In the view of JPMorgan, the market is likely to remain attentive to Regis Resources’ solidifying balance sheet. The firm’s stance suggests confidence in the company’s financial strategy and future prospects, as reflected in the Overweight rating and the AUD5.60 price target.
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