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Regency Mines PLC - Joint Venture with Legacy Hill Resources

RNS Number : 1152G
Regency Mines PLC
27 February 2018
 

Regency Mines Plc

 

("Regency" or "the Company")

 

Joint Venture with Legacy Hill Resources

 

27 February 2018

 

Further to the announcement of 6 December 2017, Regency Mines Plc, the natural resource exploration and development company with interests in hydrocarbons and base metals, announces that it has now executed a Joint Venture Agreement with Legacy Hill Resources Ltd ("LHR"), a privately owned mining company, setting out the framework for co-operation.

The purpose of the Joint Venture ("JV") is the structuring and financing of acquisitions in the U.S. metallurgical coal sector, and their subsequent management and operation.

Principal Terms of the Joint Venture

·     LHR will own 30% of the JV which reflects it role in financing, Investing and managing the acquisition to date.

·     LHR will contribute to JV a further $1m cash

·     Regency will contribute to JV up to $2m cash

·     Equity contributions to JV under this Agreement capped at $3m cash

·     Regency to hold proportion of 70% of JV equal to its proportion of cash contributions

·     If more than $3m at any stage required as cash contribution, a new agreement to be entered into dealing with that additional amount

·     LHR will be responsible for day to day to day operations

·     Detailed terms and operational matters to be formalised in full agreement

Background of Legacy Hill Resources

Legacy Hill Resources is a mining company founded by D. Saradhi Rajan. It has a multi disciplinary team focussed on technical and operating expertise and uses a low risk, cashflow focussed approach to build assets with strong growth prospects.

Saradhi Rajan, Legacy Hill Managing Director, comments: "Metallurgical coal has an important and irreplaceable role in the manufacture of steel. The USA has an important role to play in meeting global demand for high quality premium metallurgical coal. Together with Regency Mines we will be building a portfolio of low cost operations all with excellent access to infrastructure."

 

Andrew Bell, Regency Chairman, comments: "We have been working with our colleagues at Legacy Hill over the last year with a joint venture in mind, and we now agree it is appropriate to formalise the structure. We expect Legacy Hill's cost-effective mine management to create a sound foundation for a growth strategy in metallurgical coal."

 

Update on Rosa Mine

 

Further to the announcement of 6 December 2017, Regency and LH have carried out due diligence in relation to the Company's option to acquire the 80% of the Rosa metallurgical coal mine and treatment plant not already owned by Regency. The sixty days time frame for due diligence announced on 24 November 2017 has passed. Now that the JV with LH is established, Regency is reviewing its information on Rosa and speaking to stakeholders, but as suggested in the announcement of 24 November 2017, the eventual terms of a transaction acceptable to Regency would require negotiation and are likely to be different from those then set out.

 

A further announcement will be made in due course.   

 

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

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 020 7374 2212                                                           Broker First Equity Limited

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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