Regis Resources (RRL) released March quarterly production of 85koz (-7%, Q-o-Q) which was in line with Argonaut's expectations whereby wet conditions resulted in disruptions to mining at the satellite pits. Group costs increased to $905/oz (vs $855/oz +7% Q-o-Q) on lower milled grades and higher strip ratios. Operating cashflow was $71m (vs $84m, +30% Q-o-Q) with cash and bullion decreased to $168m (-2% Q-o-Q). FY18 YTD production of 269koz at AISC $873/oz remains in line with refined production guidance of 355-360koz. We move to a HOLD recommendation (prior BUY) following recent share price strength and following revisions to our model. We increase our target price to $4.69ps ($4.62 prior).
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