Ann: Full Year Results FY2023 Presentation, page-18

@Super Chicken

That's a a bit of a harsh response to a first time poster asking a genuine fundamental question. We should welcome more of this sort of information request, some of us could learn something. These platforms are richer for real dialogue rather than the constant share price commentary and anxious diatribe of people who know the price of everything and the value of nothing.

@remynz023 I'm guessing your question relates more to what D&A is rather than the specifics of what Regis used it for this year?

In mining Depreciation is the write down (on a yearly basis) of the hard assets of the business, for example the mill & plant, vehicles, buildings, equipment etc. The assets get written down over the period of the life of the assets, usually the mine life. This means that every year the profits of the company are reduced by the annual depreciation, and the balance sheet gets adjusted to show the written down value of the assets. It would be similar to you having a vehicle as a business expense, each year the car is worth less and each year your income is reduced a little by the depreciation of the car.

The reason for doing it annually is so that the costs of mining are fairly represented on a per ounce basis. Otherwise a company would show a huge loss in the year the money was spent buying capital and then overly large profits in each year the ounces are mined. To overcome this lumpiness the capital is depreciated over a longer period to give a true representation of what each ounce costs to mine. Regis had $324 Million of assets in the balance sheet in 2022 to be depreciated against future production.

One important thing to recognise is that whilst depreciation lowers the profit, it is non-cash in the year it occurs (all the cash was spent earlier on when the operations were being constructed). Accordingly cash flow from operations SHOULD be better than the profit in the same year. This is why no one really looks at the profits of a mining company they look at cash flow from year to year.

It's the same with amortisation except that with amortisation it's not the hard assets that are depreciated its things like:

• exploration costs
• pre-production costs
• acquisition costs
• pre-stripping costs

Costs that are held for future amortisation are called "Mine Properties" in the balance sheet. In 2022 Regis carried $795 Million worth of Mine Properties which will be amortised against future production. As a note $510 Million of that relates to the purchase of Tropicana.

Many companies provide Depreciation and Amortisation in the Profit & Loss statement (helpful). Regis doesn't so you have to go digging about in the notes to see the breakdown.

In summary:

• D&A reduces the profits of a company over the life of the mine
• D&A doesn't impact cash in the operating years of operation of the mine
• Don't forget that they do represent cash spent in the construction/development/acquisition stage.
• Whilst it "lowers" the profits, the benefit is that it reduces the tax burden.
• If you really want to understand mining concentrate on the cash flow.