Regis Resources : 1701 December 2016 Quarterly Activities Report

HIGHLIGHTS‌ DUKETON OPERATIONS‌

• Gold production for the quarter of 80,090 ounces is a run rate in the upper half of FY17 annual guidance range and the highest quarterly production since September 2014.

• Production was 7% higher than Q1 (74,612 ounces) as grade improved at both Garden Well and Rosemont and first ore from Gloster was processed.

• First half gold production of 154,702 ounces puts Regis on track to exceed FY16 production and in line with FY2017 annual guidance range of 300,000-330,000 ounces.

• Pre-royalty cash cost for the quarter of $804 per ounce and all in sustaining cost of $951 per ounce (Q1: CC $850/oz & AISC $946/oz), both below the lower end of FY17 guidance.

• Strong cash flow generation from operations continues with $64.5 million for the quarter (Q1:

  $59.6m).

• Mining at the Erlistoun Project commenced during the quarter with first ore carted to the Garden Well processing plant and stockpiled at the end of the quarter.

  CORPORATE

• Cash and bullion increased by $26.6 million for the quarter to $129.7 million (Q1: $103.1 million) after the payment of $7.7 million of pre strip mining and $2.4 million of start-up capital at Gloster and Erlistoun, $2.6 million on the Rosemont cutback and $6.8 million on the extensive exploration programmes at Duketon and McPhillamys.‌‌‌

• During the quarter, Regis sold 71,092 ounces of gold at an average price of A$1,719 per oz.

• Board bolstered by the appointment of Mrs Fiona Morgan as a non-executive director.

  EXPLORATION

• Drilling programmes at both Duketon (Rosemont and Tooheys Well) and McPhillamys have returned significant intercepts of gold mineralisation.

• Significant results from RC drilling Rosemont South ("RS") and under the Rosemont Main Pit ("RM") during the quarter include:

  4 metres @ 82.05 g/t gold from 249m (RM)	4 metres @ 27.29 g/t gold from 162m (RS)
  2 metres @ 108.5 g/t gold from 125m (RS)	13 metres @ 8.19 g/t gold from 274m (RM)
  4 metres @ 33.54 g/t gold from 280m (RM)	2 metres @ 51.26 g/t gold from 103m (RS)

• DD drilling at McPhillamys returned high grade mineralisation. Significant results from infill drilling during the quarter include:

  58 metres @ 2.74 g/t gold from 45 to 103m	83 metres @ 1.43 g/t gold from 214 to 297m
  121 metres @ 1.22 g/t gold from 156 to 277m	106 metres @ 1.00 g/t gold from 195 to 301m
  95 metres @ 1.38 g/t gold from 257 to 352m	62 metres @ 1.58 g/t gold from 23 to 85m

• RC drilling at Tooheys Well has continued to return high grade mineralisation. Significant results from infill drilling during the quarter include:

41 metres @ 2.91 g/t gold from 93 to 134m	19 metres @ 2.10 g/t gold from 63 to 82m
5 metres @ 22.81 g/t gold from 52 to 57m	8 metres @ 4.85 g/t gold from 71 to 79m
42 metres @ 2.28 g/t gold from 161 to 203m	10 metres @ 3.82 g/t gold from 56 to 66m

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DUKETON OPERATIONS

The Duketon Gold Project produced 80,090 ounces of gold in the December 2016 quarter (Q2). The December 2016 production run rate is in the upper half of FY17 production guidance range of 300,000

- 330,000 ounces and a 7% increase on the September 2016 quarter (Q1). This increase reflects improved grades at Garden Well and Rosemont and the previously reported anticipated increase in production as higher grade ore is processed from the satellite operations.

The pre-royalty cash cost for the quarter of $804 per ounce and the all in sustaining cost (AISC) of

$951 per ounce were both below the lower end of annual cost guidance for FY2017. AISC was in line with Q1 ($946/oz) despite the 7% higher production due to the 23% higher volume of material mined across the Duketon Project, primarily as a result of early stripping at the Gloster and Erlistoun satellite projects.

Operating results for the Regis group for Q2 were as follows:

DNO	DSO	TOTAL
Ore mined (Mbcm )	0.4	0.7	1.1
Waste mined (Mbcm)	2.5	4.8	7.3
Stripping ratio (w:o)	6.7	6.5	6.5
Ore mined (Mtonnes)	0.7	2.0	2.8
Ore milled (Mtonnes)	0.76	1.75	2.50
Head grade (g/t)	1.03	1.10	1.08
Recovery (%)	93.6	91.5	92.1
Gold production (ounces)	23,430	56,660	80,090

Previous Quarter
1.1
5.8
5.3
2.7
2.62
0.98
90.8
74,612

Cash cost (A$/oz)	672	859	804
Cash cost inc royalty (A$/oz)	740	928	874
All in Sustaining Cost (A$/oz)1	993	933	951

850

920

946

1 AISC calculated on a per ounce of production basis

Duketon Northern Operations (DNO) produced 23,430 ounces of gold at an AISC of $993 per ounce.

Gold production at DNO was up 10% from Q1. The annualised throughput rate remained strong at over 3mtpa, which combined with the higher head grade from Gloster and higher recovery, contributed to the highest quarterly gold production at DNO since the December 2014 quarter.

The first ore from the Gloster Project was carted by road to the Moolart Well plant (26 kilometres to the east) and processed during the quarter. The milled grade of Gloster ore for the quarter was 1.18g/t which made a positive contribution to project grade and production.

AISC for DNO for the quarter was $993 per ounce, 24% higher than Q1. This was due to the high start-up (prestripping) waste movement at the Gloster operation (stripping ratio 9.5) which contributed to the overall stripping ratio at DNO for the quarter of 6.7. Gloster stripping costs were not included in AISC in Q1 as commercial production was not declared until Q2. The stripping ratio (and accordingly mining cost) is expected to reduce over the last two quarters as it trends towards the budgeted stripping ratio for DNO for FY17 of 3.6.

Duketon Southern Operations (DSO) produced 56,660 ounces of gold at an AISC of $933 per ounce. DSO gold production was 6% higher than Q1 primarily as a result of higher grades processed at both Garden Well and Rosemont.

The head grades at both Garden Well and Rosemont were 11-12% higher than Q1 and in line with expectations. Mining at Rosemont during the quarter was primarily in the southern end of the pit where mining has transitioned into fresh ore resulting in improved grades by the end of the quarter. Mill throughput at Rosemont was lower as a result of the increased ore hardness and is expected to remain at current levels until mining of the southern pit extension commences in the second half of 2017.

With the 6% higher production from DSO, AISC of $933 per ounce were 7% lower than Q1 despite the mining stripping ratio of 6.5 in Q2 being higher than the 5.3 in Q1. This is due to Q2 stripping ratio including pre-production stripping at Erlistoun (costs capitalised, not included in AISC). Stripping costs for Erlistoun will be included in DSO AISC in Q3 as the operation will achieve commercial production.

Mining of the Erlistoun Project and stockpiling of ore at the operation commenced during the quarter. The first ore was carted by road to the Garden Well processing plant (8 kilometres to the north) late in the quarter and is expected to have a positive effect on the grade processed in Q3. Erlistoun ore supply is expected to be continuous but in modest tonnages until the start of Q4 when development of the open cut reaches significant ore zones.

Erlistoun open pit - January 2017

CORPORATE Cash Position

The Duketon project generated operating cash flow of $64.5 million in the December 2016 quarter. At the end of the quarter Regis had $129.7 million in cash and bullion an increase of $26.6 million for the quarter. This increase is after the payment of $13.0 million of income tax, $7.7 million of pre strip mining and $2.4 million of start-up capital at Gloster and Erlistoun, $2.6 million on the Rosemont cutback and $6.8 million on the extensive exploration programmes at Duketon and McPhillamys. The expenditure on start-up capital, pre-stripping and Rosemont cutback are all expected to taper over the next two quarters.

The following waterfall chart highlights the movement in Regis' cash reserves over the quarter.

Gold Sales & Hedging

During Q2, Regis sold 71,092 ounces of gold at an average price of A$1,719 per ounce (Q1: 73,607 ounces at A$1,765 per ounce). The Company delivered the gold produced during the quarter into a combination of spot deferred contracts and at the prevailing spot price. The total hedging position at the end of the quarter was 404,825 ounces, being 40,000 ounces of flat forward contracts with a delivery price of A$1,454 per ounce and 364,825 ounces of spot deferred contracts with a price of A$1,556 per ounce.

Director Appointment

In October 2016 Regis announced the appointment of Ms Fiona Morgan as a non-executive director. Ms Morgan is a Chartered Professional Engineer with over 23 years' experience in the mining industry, including working on gold, nickel, coal and iron ore projects. She has wide ranging experience in operations and project management, maintenance, research and design of both underground and surface mining infrastructure and is currently the Managing Director and Chief Executive Officer of Mintrex Pty Ltd, a highly regarded and longstanding consulting engineering company.