Regis Resources (ASX:RRL,OTC Pink:RGRNF) said its McPhillamys gold project in New South Wales (NSW) is no longer viable after a decision from Tanya Plibersek, Australia's minister for the environment and water.
Plibersek made a declaration of protection over part of the approved project site under Section 10 of the Aboriginal and Torres Strait Islander Heritage Protection Act 1984, as per Regis' Monday (August 19) press release.
The company said the declaration applies to freehold land that it owns and impacts a "critical area" of McPhillamys, which has already received approval under both state and federal regulations.
According to Regis, this week's declaration affects McPhillamys' proposed tailings storage facility, which falls within the boundaries of the declaration area. Plibersek's decision follows a four year assessment process during which Regis reportedly emphasised to the minister that the project would not be feasible if such a declaration were issued.
McPhillamys was granted development consent by the NSW Independent Planning Commission in March 2023 after a review process that involved input from Aboriginal representatives and the local community. In May 2023, it was also approved under the Environmental Protection and Biodiversity Conservation Act by a delegate of Plibersek.
While Plibersek has claimed the declaration will not halt the mine, Regis does not agree. The company expressed surprise at the minister’s decision, highlighting that it contradicts earlier approvals and the outcome of various assessments.
The company has also noted that finding an alternative site for the tailings storage facility would require restarting the approval process, potentially taking between five and 10 years with no assurance of a feasible solution.
Regis said it will now have to reassess the US$190 million carrying value of McPhillamys. The company is also considering its legal options while determining the project’s future and its commitment to ongoing expenditures.
Regis plans to hold an analyst and market briefing to discuss the situation in further detail.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
