TIDMRGM
RNS Number : 5004M
Regency Mines PLC
28 July 2017
Regency Mines Plc
("Regency" or "the Company)
Update
28 July 2017
Regency Mines plc (AIM:RGM) the natural resource exploration,
investment and development company announces an update on some of
its current operations and investments.
Onshore UK Oil
As previously announced on 10 July 2017, the Company has
disposed of 1.9% of its 5% holding in Horse Hill Development Ltd
("HHDL"), and is proceeding with the steps necessary for completion
of this transaction. Following completion Regency will hold
17,361,862 shares in UK Oil and Gas plc (AIM: "UKOG"). Through its
holding in HHDL as well as its new holding in UKOG Regency has a
diversified exposure to the Weald Basin, a focus of current onshore
exploration in the UK.
The thesis of an extensive, thick and continuous oil deposit of
major economic significance in the Kimmeridgian limestones and
clays underlying the Weald will be tested, and may be significantly
advanced, over coming months by some or all of the current flow
test, exploration and development programmes being conducted by
UKOG at Horse Hill and Broadford Bridge, and by Angus Energy plc at
Brockham.
US Coal
Progress on US coal production at the Rosa mine and the second
project identified in the 9 March 17 news release as being invested
through Vali Carbon Corporation, has been slower than originally
anticipated, although contract coal washing at Rosa has continued
during this period. Ongoing deficiencies in local management and
organisation have become clear over the past months and these have
manifested themselves through delays in production and reporting
procedures at both projects.
Regency introduced a coal operations and financing specialist to
the operator of the projects, UK Carbon Resolutions, earlier in the
year with a view to introducing professional commodity specific
management and this third party continues to work actively on
formulating a go-forward plan, which may include additional coal
assets.
The Board feels that the original investment thesis, investing
to restart US metallurgical coal production during an extended
period of high prices and on the back of the US President's stated
ambition to support US coal producers, remains attractive.
Regency will continue to act jointly with other parties to
rectify the operational deficiencies and restructure its interests
appropriately. The Company will report further once this process
has been finalized.
Curzon - Coal Bed Methane
Regency attended a site visit in Oregon earlier this year in
which the future board of directors of Curzon gathered to be
briefed on the status of the business and on its gas project in the
north-western United States. Following those meetings Curzon
confirmed its intention to obtain a public listing, to test its
five existing gas wells and to drill several additional wells with
the objective to enter production and determine commerciality of
the project in the shortest possible timeframe.
Regency is to obtain a seat on the board of Curzon post-listing
and expects to have a final shareholding of approximately 10% of
the post-IPO share capital of the business.
Updated operational plans are expected to be announced at the
time of listing and will be announced once available. Additional
information on Curzon may be found on the Company's website and in
the RNS of 26 May 2016.
Mambare / Direct Nickel
Regency retains a 50% stake in the Mambare nickel projects in
Papua New Guinea, as well as a small stake in the restructured
Direct Nickel Limited in Australia. After a period in which Regency
carried the cost burden at Mambare, the new Direct Nickel Limited
has been paying 100% of the costs of the project while they make up
for historical imbalances as announced in the RNS of 15 July
2016.
The project itself remains on care and maintenance in New Guinea
with the key licenses kept in good standing and all other costs
reduced to absolute minimal levels. Both members of the JV believe
the project has substantial future potential particularly following
any increase in nickel prices and both are resolved to retain the
project at the lowest possible cost until conditions improve.
Regency's partner, Direct Nickel Limited, now under new
management and fully recapitalized, remains focused on facilitating
the proliferation of its unique nickel processing technology
through additional joint ventures in Indonesia and other locations.
More information on Direct Nickel can be found at their website:
www.directnickel.com.
Motzfeldt
Following the announcement of 22 February 2017 that Value
Generation Limited had purchased an option to acquire 100% of the
Company's Motzfeldt multi-element projects in Greenland, this
option has now lapsed without exercise, although discussions with
Value Generation concerning the project have continued.
The Company retains a 100% interest in license 2014/01 in
Greenland and the project remains on care and maintenance, while
Regency explores additional avenues of development.
Andrew Bell, Regency Chairman, comments: "Progress has been made
on many fronts in 2017 to date, although not all projects have
advanced as quickly as had been hoped. Our Horse Hill exposure has
now been widened to a much larger Weald basin exposure, and the
near quadrupling of the UKOG price from the price at which we
contracted to acquire shares for part of our stake in HHDL has been
one sign of the growing optimism that the Weald will become an
important oil province. Our low cost pre-IPO investment in Curzon,
with the opportunity to increase our holding at listing, is another
developing story where we are very satisfied with progress and
excited about near-term potential growth and newsflow.
Our initiatives in the US coal space have developed much more
slowly than expected due primarily to our partner's operational
weaknesses and overly optimistic projections; however we strongly
believe that the underlying investment thesis remains attractive.
Gaps in our partner's capabilities have allowed Regency to gain
access to these opportunities in the first place and from early in
the year we took active steps to address this key risk going
forward by introducing a partner with strong management and the
skills and resources to operate strategically. Reaching a
conclusion to this process has taken time but a programme of mine
planning, visits, and structuring is actively under way.
Structure and timetable and strategic plan are expected to
evolve further over the coming weeks. Announcements will be made as
soon as possible and the object is an outcome which enables us to
be part of a much larger coal entity which will be appropriately
funded and staffed with a multi-year development plan in place.
In the meantime, Regency offers investors an attractive and
dynamic set of projects and investments in both oil and gas and
mining assets in several international locations. The quality and
strategic nature of several of the key assets is exemplified by the
recent appreciation of our onshore UK investments.
We look forward to updating the markets as our portfolio
continues to evolve."
For further information contact:
Andrew Bell 0207 747 9960 Chairman Regency Mines Plc
Scott Kaintz 0207 747 9960 Executive Director Regency Mines
Plc
Roland Cornish/Rosalind Hill Abrahams 0207 628 3396 NOMAD Beaumont Cornish Limited
Jason Robertson 0129 351 7744 Broker Dowgate Capital
Stockbrokers Ltd.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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