In afternoon trade today, shares of gold miner Regis Resources Limited (ASX: RRL) were trending as much as 4% higher following the announcement of its half-year results this morning.
In the six months to 31 December 2014, Regis reported a healthy 23% jump in revenues, to $240.6 million, but just a 4.3% increase in profit year-over-year.
Pleasingly, half-year diluted earnings per share climbed to 9.54 cents, whilst total debt was cut in half, from $40 million to $20.1 million.
The company said increased production from operations at Moolart Well and Rosement helped grow revenue over the period. Unfortunately the company's cash costs (before royalties) grew to $763 per ounce, from $723 per ounce. Adverse movements in average gold prices narrowed margins further.
Regis Resources' half year cash flow from operations also fell 30%, to $70.9 million. This was as a result of the repayment of deferred earthmoving contractor payments which were, "associated with February 2014 flooding events."
Should you buy Regis Resources shares?
Earlier this month Regis Resources shares fell up to 27% in one day's trading following a downward revision to full year production guidance. Whilst shares are drifting marginally higher today, the sell-off should serve as a reminder to any investor looking to buy gold mining stocks, they can be extremely risky investments. I would hold off buying Regis shares, for now.
