"Strategic shift" into oil and gas may see minerals explorer join a number of other of AIM-listed groups backing the Horse Hill UK onshore play.
Big picture - Why invest in Regency Mines
Regency Mines Snapshot
Regency Mines seeks to use its financial and exploration skills to leverage opportunity in the mineral sector. It looks for projects internationally where there is the possibility of large-scale discoveries, for maximum leverage to exploration success.
It supplements this by shorter term exploration in the active and transparent Australian market, and by dealing in assets. It aims to enhance returns by active engagement in new technologies and frontier markets. Regency adds value to its assets by joint venture, acquisition and disposal of mineral resource interests in addition to being an active investor in the mineral resources corporate market.
Strategic focus and diversification
The Company’s primary focus has been on nickel, with a secondary focus on base and precious metals exploration and opportunities in Australia. Such an asset mix ensures exposure to a variety of commodity types and protects against volatility in individual markets.
The Company seeks projects and commodities that provide pay-off potential several orders of magnitude larger than the initial investment. The Mambare Nickel Project and the potential Sudanese agro-minerals project if developed all represent investments with company-transformation potential.
Value identification and realisation
Regency seeks value creation in a variety of locations and situations. For example, investing in a company that is at the forefront of ground-breaking nickel processing technology such as DNi, willingness to explore and operate in untapped frontier markets such as Sudan and the flexibility to recognise opportunities and monetise assets rapidly.
Sudan Agro-Minerals Project
- Agromineral concessions with potential for potash, phosphate and gypsum
- Farm in option to obtain 51% ownership of licence holder IMRAS available
- Early stage exploration at Jebel Abyad has indicated potential correlations with Mediterranean Phosphate Belt
- Red Sea tenement prospective for potash and gypsum
International Mineral Resources (Agrominerals Sudan) (“IMRAS”), is a British and Sudanese-owned exploration company which holds a number of promising agromineral prospects and intends to become the representative agrominerals company in Sudan. Regency’s technical team is leading the exploration programme across several concession areas prospective for agrominerals. Regency holds the right to farm in up to a 51% interest in IMRAS by exploration leading to the development of two JORC resources.
Prior to the independence of South Sudan in 2011, exploration activities for natural resources focussed mainly on oil and gas. The government is now actively promoting and encouraging investment from Western exploration companies in an attempt to diversify and expand the country’s industry. The resource potential of Sudan is not well known – less than 10% of the country has ever been explored for mineral deposits. Regency Mines is working closely with the Ministry of Minerals to maximise positive exploration outcomes, the results of which could benefit not only the Company but also the local economy and Sudan’s own agricultural development. It is an encouraging sign that Sudan has expanded its natural resource focus and is dedicated to assisting mineral exploration companies in developing its resources.
The Food and Agricultural Organization of the United Nations (“FAO”), estimates that world food production will need to rise by 70% if global population grows significantly by 2050, as expected. If the FAO’s predictions are correct, the importance of discovering new agromineral resources – phosphate, gypsum and potash in particular, is going to become critical. For food yields to increase at the rate projections could demand, essential crop nutrients must be provided.
The IMRAS concessions
The main agrominerals currently under investigation are phosphate in the Jebel Abyad concession and potash and gypsum in the Red Sea concession.
Extensive reviews by the technical team at Regency Mines have indicated potential geological correlations between the Jebel Abyad sedimentary sequence and the economic phosphate deposits found in the prolific Mediterranean Phosphate Belt. This geological formation extends from the Middle East to the west coast of Africa and may contain up to 79% of world phosphate reserves. An initial field exploration programme in the Jebel Abyad concession took place in November 2013 with a goal of locating the presence and extent of the Mediterranean phosphate horizons within the sedimentary sequence.
A 2013 trip to the Red Sea concession has confirmed the presence of gypsum exposed at surface and work is currently underway to further delineate the extent and thickness of the formation. Historic boreholes drilled proximal to the concession area record the presence of potassium-rich salts (“potash”) within evaporite sequences at depth. The next stage of fieldwork will be to confirm the existence, grade and mineralogy of any potash at surface within the concession area. A recent application was made to extend the Red Sea concession in order to include additional areas of interest.
- 4,000m drill programme designed to test new areas of plateau and to establish JORC Mineral Resource.
- Applications in process for two large nearby areas of geothermal potential.
The Regency Mines plc and Direct Nickel inc Joint-Venture, Oro Nickel, owns 100% of the major lateritic nickel deposit, Mambare, in Papua New Guinea (exploration licence 1390). The deposit forms a 20x6 km plateau (dwarfs better-known 7x2 km Wowo Gap Plateau) and the licence comprise 75 sub-blocks covering 242 sq km, parts of which have been explored since the 1960s. In 1999, Anaconda estimated in a 158 sq km section: 630 Mt at 0.78%Ni and 200 Mt at 1.01%Ni in the saprolitic layer; better apparent grade and topography than the Ramu project, currently under development.
JV with Direct Nickel (DNi) as technology/exploration partner:
a) An emerging world class nickel project – Mambare Papua New Guinea
b) One of the lowest capital cost technologies available for nickel laterites, DNi Nickel Processing Technology
c) Highly experienced management team
d) To create a producing nickel company that can produce up to 20k tonnes per annum of nickel within four years, expanding to 60k tonnes per annum.
Location and geology
The Mambare Plateau is an elevated 20x7 km, old land surface west of the Ajule-Kajale Range, developed on tectonite ultramafics. To the east, these ultramafics are overlain by gabbroic rocks and submarine basaltic volcanics. Kokoda and Mamba Estate to the south-west of Mambare Plateau are linked to Popondetta and Oro Bay by gravel, at first, and sealed road.
Across the top, flat surface of the plateau, and along the slopes, the weathered ultramafic bedrock has formed significant layers of lateritic and saprolitic material. The exposed weathered material has been overlain by a protective cover of volcanic ash (up to about 6m thick).
Exploration to date
The laterite bearing nickel potential of the Mambare Plateau, some 2 to 20 km north of Kokoda, has been explored intermittently since 1960.
Previous exploration was conducted by several companies in the 1960's, including: the Bureau of Mineral Resources; Homestake-Hanna Syndicate; Amax Mining (Australia) Inc.; Southern Mining & Development Co. Ltd; and PNG Nickel Ltd.
Exploration consisted of pitting and hand augering with at least one bulldozer trench being dug. Between 1960 and 1971, 240 auger holes were drilled and 56 pits and one costean dug. In 1999 Anaconda Nickel Ltd reviewed the data over a 158 sq km area of the Mambare Plateau and estimated two limonite resource potentials: 630 Mt at 0.78% nickel with a 0.5% cut-off and 200 Mt at 1.01% nickel with a 0.8% cut-off.
Much of the previous auger drilling and pitting were too shallow to test adequately the limonite ore and in many cases failed to encounter the saprolite ore or ended in mineralisation. The potential resource needs to be further evaluated with diamond drilling to test both this limonite ore and the underlying poorly tested saprolite ore. The underlying saprolite ore is suggested to be as thick as the overlying limonite ore. Geophysical techniques such as magnetics and ground penetrating radar may help better definition of bedrock rock types and thickness of laterite profiles.
2008 drilling programme
In 2008, Regency executed an initial 4000m koken drilling programme over the southern slopes of the plateau.
Drilling results show that the laterite and saprolite development is greatest mostly along shallower gradients where the right bedrock is present. Such shallow slopes are at: ridge tops, base of ridges and valley floors. Limited laterite development was found to occur on the steeper slopes where erosion and weathering rates are higher.
More drilling is anticipated over the wider area of the main plateau with broad spaced regional testing across the full plateau to define its resource potential.
Infill drilling is anticipated between the completed lines, in the three high grade zones, to further constrain the extent of mineralisation. Deeper drilling is also planned to fully assess the extent of the saprolite profile.
The large size of the 20x6 km Mambare Plateau, compared with the 7x2 km envelope of known mineralisation at the nearby Wowo Gap, gives a large potential area of mineralisation and the possibility of a significant resource.
Weston Australia & Queensland
WA and QLD exploration
- Three tenements in the Fraser Range area, adjacent to Sirius’ Nova Deposit
- Partial disposal of Fraser Range into Ram Resources Limited, with Regency maintaining an interest, a royalty, and performance shares
- Further projects in Australia include base metals and graphite in Western Australia, and a gold/copper prospect in Queensland
The Company’s main interest in Australia consists of three tenements with an area of 271 sq km in the Fraser Range area. These tenements are concentrated along the margin between the Yilgarn craton, which covers most of the southern part of Western Australia, and the Albany-Fraser metamorphic terrane lying to the south and southeast of it.
This geological boundary has been the focus of the Company’s recent attention and is increasingly a hub of exploration activities by international and Australian mining and exploration companies. To the north-east lies the Tropicana gold discovery held by AngloGold Ashanti, and adjacent to Regency’s Fraser Range tenements lies the nickel-copper discovery by Sirius Resources. These discoveries have opened up the entire area for new exploration models and the performance of some of the participants has attracted significant media attention.
Regency Mines sold its interests in its Fraser Range project to Ram Resources Limited (“Ram”), a company listed on the Australian Stock Exchange (ASX:RMR). As a result of this transaction, Ram has been able to raise A$1.5 million and intends to carry out exploration and drilling in 2014. Regency is left with a 19.9% interest in Ram, the right to appoint directors, a royalty interest, and a 20% carried interest in the project and performance shares in Ram.
Ram has carried out geophysical and geochemical work and identified a number of targets for both gold and base metals. Any Ram success in the Fraser Range area would be a powerful stimulant for Regency’s own performance.
Regency’s early identification of the potential of the Yilgarn/Albany-Fraser boundary is an example of the Company’s emphasis on opportunistic development and value-enhancing acquisitions.
Further to the southwest we have interests in other tenements that are prospective for graphite and other minerals, including tenements adjacent to the Halbert high-grade graphite mine. Other tenements held in Australia include a historic gold-copper prospect in Queensland and a prospective base metals area adjacent to a significant recent discovery in Western Australia.
Andrew Bell, MA, LLB, FGS, Chairman and CEO
Andrew Bell began his career as a natural resources analyst at Morgan Grenfell & Co. in the 1970s. His business experience encompasses periods in fund management and advisory work at leading financial institutions, international corporate finance work and private equity. Andrew Bell’s listed company directorships are Red Rock Resources Plc (chairman), Greatland Gold Plc (chairman), Jupiter Mines Ltd (director), Resource Star Ltd (chairman) and Cue Resources Inc.
Edmund Bugnosen, BSc, Executive Director
Edmund Bugnosen has a BSc in Mining Engineering from Adamson University, Philippines and studied Environmental Science at the International Institute of Hydraulics and Environmental Engineering (IHE) in Holland. He has worked in both the government and private sectors of the Philippine mining industry. Since 1989 he has worked out of the UK as a consultant for governments, mining companies, NGOs and development agencies, including the UN, UNIDO, the World Bank, the EU, ILO, DFID, and the BGS. Edmund Bugnosen has also served as Senior Mining Engineer in the Department of Mines and Petroleum of Papua New Guinea and as a Technical Assistant to the Namibian Ministry of Mines and Energy. He has published and presented papers on mining laws and regulation, small-scale mining and related environmental, social and development issues.
Scott Kaintz, BS, MBA, Executive Director
Scott Kaintz has a MBA from London Business School and Columbia Business Schools. He started his career as a US Air Force Intelligence Officer and analyst working across Europe, the Middle East and Central Asia. Scott Kaintz has held operational and managerial roles in the defence industry and more recently worked in corporate finance and investment funds, focusing primarily on capital raising efforts and debt and equity investments in small-cap companies. A year ago he joined Regency as Head of Corporate Finance.
Julian Lee, MA, ACCA, Non-executive Director
Julian qualified as an accountant with Deloitte & Touche in 1996. Subsequently he worked in corporate finance and venture capital in London and New York. He has co-founded a number of companies in the mining exploration, healthcare, life sciences, med-tech and FMCG sectors and is currently CEO of Rex Exploration Ltd, an exploration company focussed on gold and coal exploration in Nigeria.
John Watkins, FCA, Non-executive Director
John Watkins is a chartered accountant and a former partner of Ernst & Young and Neville Russell. He is a director of Starvest plc, a substantial shareholder of Regency Mines plc. In addition, he is a director of Red Rock Resources plc and Greatland Gold plc. Starvest plc, Red Rock Resources plc and Greatland Gold plc are listed on AIM. He is chairman of Equity Resources plc and Rare Earths and Metals plc.
Number of warrants in issue as at 03 July 2015
Significant shareholders as at 03 July 2015
TD Direct Investing Nominees (Europe) Ltd SMKTNOMS 350,473,907 17.07%
Barclayshare Nominees Ltd - 262,349,752 12.78%
JIM Nominees Limited - 197,678,604 9.63%
Julian Lee - 164,108,382 7.99%
Yorkville Advisors - 139,164,318 6.78%
Mr. Reiner Rensch - 85,000,000 4.14%
HSDL Nominees Limited JARVIS 95,097,276 4.63%
Hargreaves Lansdown (Nominees) Limited HLNOM 75,457,496 3.68%
3/F, 55 Gower Street
1 Ivybridge House
1 Adam Street
Telephone: +44(0) 207 747 9960
Email: [email protected]
30 Finsbury Square
London EC2P 2YU
1 High Street
Surrey GU7 1AZ