Regis Resources (ASX:RRL) announces it will invest upwards of $120 million to expand gold output, establishing two new underground mines in Western Australia. This marks the first significant indication of the positive impact of the 2024 gold price surge on local development.

The two new mines are slated to commence operations by 2027, with Regis estimating they will contribute between 100,000 and 120,000 ounces of gold to its production once fully operational.

These expansion projects will propel Regis into the ranks of the top five Australian-owned producers, securing the third position based on current projections.

The first ore extraction is scheduled between July and September of 2026, aligning with the initial quarter of Regis' 2026-27 financial year. The company states that the Garden Well Main and Rosemont Stage 3 mines will bolster its underground operations at the Duketon site in the northwestern goldfields of WA, situated north of Laverton.

Based on the All In Sustaining Cost estimates for the new mines, they are expected to be more profitable due to the surge in world gold prices, which have surpassed $2,000 USD per ounce to around $2,300 USD, and the corresponding increase in the Australian price to over $A3,300 per ounce.

Regis reports that the Garden Well Main mine will have an AISC ranging from $2,050 to $2,150 per ounce, while the Rosemont Stage 3 mine will have a higher AISC ranging from $2,400 to $2,500 per ounce.

The Garden Well mine is estimated to contain 3.2 million tonnes of gold at 2.8 grams per tonne (g/t), totaling 295,000 ounces of contained gold, with a cut-off grade of 2.2 g/t gold. Its preproduction capital cost falls within the range of $75 to $95 million, with operations commencing now and first ore extraction expected in the initial quarter of 2025-26.

Regis indicates that the scheduled underground ore mining rates will reach up to 900,000 tonnes per year, resulting in annual production of around 60,000 to 70,000 ounces.

The smaller Rosemont mine is estimated to contain 1.7 million tonnes of ore at 2.8 g/t gold, yielding 157,000 ounces of gold at a cut-off grade of 2.3 g/t. Its estimated cost is between $45 and $55 million, with an annual production of around 600,000 tonnes and a yearly output ranging from 40,000 to 50,000 ounces. First ore extraction is anticipated to align with Garden Well.

Regis CEO, Jim Beyer, stated in the announcement, "The development decision for these value accretive underground mines is another important milestone as Regis progresses on delivering into its underground growth strategy. At both Garden Well Main and Rosemont, we have again expanded our underground reserves. Since we announced our Maiden Resource at Rosemont in 2019, each year, we have continued to enhance the value of the underground by increasing our reserves. This is a trend across our underground mines that we aim to continue well into the future."

"With Garden Well Main and Rosemont Stage 3 underground mines, we will be operating three independent underground mining areas. Given the way that the Duketon orebodies have behaved historically and based on our current exploration results, we are confident in our ability to continue to expand our underground mining footprint. We are well on the way to operating four to five underground mines at Duketon to deliver sustainable gold production of 200,000 to 250,000 ounces of gold each year. While the growth in underground is a vital part of our value growth strategy, we also continue exploring for additional high-value, large-scale open pits across our dominant holding across the Duketon Greenstone Belt," Beyer concluded.