TIDMRGM
RNS Number : 5517B
Regency Mines PLC
11 January 2018
Regency Mines PLC
("Regency" or the "Company")
Business Update, Strategic Financing and Director
Participation
11 January 2018
Regency Mines Plc (LON: RGM) is pleased to announce a business
update, strategic financing and confirmation of director
participation.
Highlights:
-- Regency to rebrand its nickel/cobalt and related assets as a
battery metals function in recognition of the Company's position in
these mineral resources to be used in EV batteries and related
energy technologies;
-- Operations at Mambare, the Company's major nickel/cobalt project, to be accelerated;
-- Advanced due diligence and discussions underway to expand the
Company's coal footprint within its hydrocarbon energy
function;
-- Strategic financing undertaken at 0.55p, the current market
bid price, to raise GBP1,050,000 through the issue of 190,909,090
new ordinary shares of 0.01 pence each ("Shares")
-- Uses of funds to include repayment in full of convertible
loan at cost of cGBP630,000 leaving Regency balance sheet free of
debt;
-- Directors Andrew Bell and Scott Kaintz to invest an aggregate
GBP100,000 cash in the strategic financing to acquire 18,181,818
Shares;
-- Each Share issued in the financing comes with a warrant to
subscribe for a further share at 1.0p, with the Company able to
accelerate warrant conversion in the event that the volume weighted
average price of Shares equals or exceeds 3.5p for ten consecutive
business days;
Andrew Bell, Chairman, comments: "Regency Mines faces a
significant opportunity in the fast-evolving battery metals sector.
We intend to focus on the nickel/cobalt sector, while still
proactively developing our hydrocarbon and coal interests with a
view to achieving early cash flow. We believe we can find value
creation opportunities for shareholders as EV battery and power
storage demand see advances in battery technology and this leads to
changes in the pattern of demand for key metals.
The new capital raised in this funding will enable the Company
to repay in its entirety the convertible loan from YA II PN Ltd
announced on 5 April 2017. This will make Regency debt-free for the
first time since 2011. We thank YA for making the facility
available as part of a rollover of obligations in 2017, and for
their support and co-operation throughout.
Regency's stronger capital base will we believe enable it to
exploit more effectively the expected improvement in nickel and
cobalt demand, both from the battery and the stainless steel
sector, after a near nine year bear market in nickel. A weak but
consistent uptrend in nickel prices has been underway since late
2015, that we expect to continue.
Regency is looking to strengthen its strategic capabilities in
early 2018 with a non-executive appointment to the board, and
further announcements will be made as soon as possible."
Business Update:
Regency was founded in 2004 and listed in London in 2005 as a
natural resource operating company. The Company has been proactive
throughout the period since listing, notwithstanding the highly
cyclical nature of the natural resource market, and the extremely
challenging conditions of recent years.
Painful though the process has sometimes been, Regency has
maintained its hold on the Mambare lateritic nickel/cobalt asset in
Papua New Guinea throughout a period when nickel has been among the
least favoured metals, recognising the strategic importance of this
asset and the expectation that demand would one day recover. Market
adversity yields opportunity and we have found that with existing
interests and the new opportunity pathways we have followed the
Company is now well-positioned with businesses in coal bed methane
and metallurgical coal which have some potential for generating
early cash flow, and a strategic position in the new energy area
through its large Resources of the key metals used in EV
batteries.
The Company's board is of the view that there is an opportunity
for re-setting the market's valuation of the Company, particularly
through achieving recognition of Regency's position in battery
metals. Our business interests encompass mineral exploration,
Resource definition, mineral development and production, and
prospectively the production and sale of intermediate and final
mineral products. This last element is increasingly
technology-dependent, and we need to prepare for the changes in
product demand that will come with the development of the electric
battery market as well as the growing requirement for traceability
and ethical sourcing of raw materials. This requires a wider vision
and new skills. Our small investment (currently 3.3%) through our
new subsidiary EsTeq Ltd in the Tesla car-hire business White Car
adds a new dimension to our business where we will see the final
destination of our raw materials.
In other words, Regency is becoming one of the small but growing
number of listed companies in London with significant interests in
battery metals and materials.
In this positioning the Company benefits from its longstanding
interest in the 50% owned Mambare Nickel-Cobalt project, where with
part of the plateau flank and just 3% of the mineralised plateau
tested we have already achieved through our exploration efforts a
maiden JORC-compliant Resource, announced on 13 June 2012, of
1.53million tonnes of in-situ Nickel and 146,000 tonnes of in-situ
Cobalt. Given the current metal prices of nickel (US$12,600/t) and
cobalt (US$75,300), the magnitude and potential of Mambare is
readily apparent.
We intend to step up operational activities at Mambare in the
near term and further news in respect of our planned work
programmes will follow.
We are currently engaged in due diligence on a potential
increase to 100% in our interest in the Rosa coal mine. Furthermore
we are conducting due diligence in relation to our coal agreement
with Legacy Hill, announced on 6 December 2017, under which we are
jointly seeking to manage and expand our coal footprint in the
United States. We expect to devote significant time and effort to
high value metallurgical coal opportunities in the U.S. during 2018
and we will advise the market accordingly as transactions are
concluded.
On 14 December 2017 we announced the formation of ESTEQ Limited,
a 100% owned subsidiary to act as the vehicle from which we could
view battery technologies. This division is currently implementing
the agreement already announced for the 3.3% investment in White
Car Limited, where further news will follow.
Regency is in a robust financial position with cash at bank and
near cash investments in Curzon Energy plc (LON:CZN) and Alba
Minerals plc (LON:ALBA). We have a convertible loan in place for
circa GBP630,000 which the Company's board has resolved to
accelerate its exit from this facility.
Following completion of the Placing, a significant part of the
proceeds will be utilised to repay in full the convertible loan and
the Company will, for the first time since 2011, have no debt on
its balance sheet.
In addition, the Company believes the time is right to appoint
an additional Non-Executive Director to the Board, and we look
forward to announcing progress on this in due course.
Strategic Financing
Regency Mines has raised GBP1,050,000 by way of a placing of
190,909,090 new ordinary shares of 0.01 pence each ("Shares") in
the Company at a price of 0.55 per Share with 1 for 1 warrants
exercisable at a price of 1 penny per Share for twenty-four months
("January 2020 Warrants")(together the "Placing").
17,272,727 Shares were subscribed by Andrew Bell, a director of
the Company. 909,091 Share were subscribed by Scott Kaintz, a
director of the Company.
The table below sets out the total shareholding and interests of
Mr Bell and Mr Kaintz in the share capital of the Company:
Ordinary Shares Total % of Enlarged Options Warrants
Shares Issued
Share
Capital
----------- ----------------------- ----------- -------------- ----------- -----------
Directors Direct Indirect
----------- ----------- ---------- ----------- -------------- ----------- -----------
Andrew R
M Bell 27,600,720 4,877,654 32,478,374 4.22% 13,360,000 19,494,949
----------- ----------- ---------- ----------- -------------- ----------- -----------
Scott C
Kaintz 930,143 4,877,654 5,807,797 0.75% 12,420,000 909,091
----------- ----------- ---------- ----------- -------------- ----------- -----------
Mr A Bell and Mr S Kaintz are each the beneficiaries of
4,877,654 shares held on their behalf by the SIP Trustees.
Further Information and Additional Terms
The January 2020 Warrants are subject to call at seven days'
notice should the volume weighted average price of the Shares equal
or exceed 3.5 pence for ten consecutive days.
The Placing is conditional on admission of the Shares to trading
on AIM ("Admission").
Application will be made to the London Stock Exchange for
Admission of the Shares, which will rank pari passu with the
Company's existing issued Ordinary Shares. Dealings are expected to
commence at 8.00 a.m. on or around 23 January 2018.
Total Voting Rights (TVR)
Following the issue of the Placing Shares, the issued share
capital of the Company will consist of 769,704,154 ordinary shares
of 0.01p each with voting rights. No Ordinary Shares are held in
Treasury.
The above figure of 769,704,154 may be used by shareholders as
the denominator for the calculations by which they will determine
if they are required to notify their interest in, or a change to
their interest in the Company under the Disclosure and Transparency
Rules.
Note: Market soundings, as defined in the Market Abuse
Regulation ("MAR"), were taken in respect of the Placing with the
result that certain persons became aware of inside information, as
permitted by MAR. That inside information is set out in this
announcement and has been disclosed as soon as possible in
accordance with paragraph 7 of article 17 of MAR. Therefore, those
persons that received inside information in a market sounding are
no longer in possession of inside information relating to the
Company and its securities.
For further information, please contact:
Andrew Bell 0207 747 9960 Chairman Regency Mines Plc
Scott Kaintz 0207 747 9960 Director Regency Mines Plc
Roland Cornish/ Rosalind Hill Abrahams 0207 628 3396 NOMAD Beaumont Cornish Limited
Jason Robertson 0207 374 2212 Broker First Equity Limited
This information is provided by RNS
The company news service from the London Stock Exchange
END
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