07:00 Fri 23 Mar 2018
Regency Mines PLC - Half-year Report
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Chairman's statement
Dear Shareholders,
It is with much pleasure that we present these interim results. The six month period to
A considerable profit was generated from this sale, only partially offset by an impairment of Regency's interest in a metallurgical coal joint venture in the
These developments significantly improved the financial position of the Company.
Since the end of the calendar year, further funding of
It is worth reminding shareholders, many of whom have come on the register since 2010, how the high level of debt we have carried ever since that time and up until recently came about. We had entered into a joint venture in relation to our Mambare lateritic nickel-cobalt project in
Whether we were right in the long term to make that decision will now be seen. We know that in the short and medium term it was proved wrong, for nickel, having failed to recover like other metals between the global financial crisis of 2008 and the commodity market peak in 2010, continued to perform poorly as other metals came out of the down-cycle in 2016. Last year began to see a recovery in the cobalt price, which continues, and this year has seen the start of a recovery in the nickel price, and a pattern of increasing demand for these materials for electric vehicle and other storage batteries that we expect to continue.
An opportunity now exists to reinvigorate the Mambare project, and the extremely large Resource we have proved up from what is only a small part of the deposit gives us a strong platform to work from.
Meanwhile we have continued to work on building up our presence in hydrocarbon energy sources. Although we have sold out of
Our first steps last year into the metallurgical coal market in the
The objective of the joint venture is to acquire and assemble a critical mass of production and reserves. We have known and worked with our partners at Legacy Hill for some time now, and have developed a high regard for their capabilities and strengths and an awareness of the degree to which they are complementary to our own. We are confident that we will be able to build a strong working relationship. Through this relationship, we will also try to address the potential of the Rosa mine and other coal assets.
At the end of 2017, we announced the formation of a Battery and Storage Technologies Division, which complements our hydrocarbon energy and battery metal activities and will address new developments in battery technology and developing uses for the metals in our portfolio. The first investment made was of
We thank our shareholders for their strong support during a period of transition, and look forward to an exciting period in which, from a solid financial base, we start to reap the rewards of investments undertaken and decisions made.
Chairman and CEO
23 March 2018
Consolidated statement of financial position
as at
|
Notes |
|
|
|
|
|
|
|
Unaudited, £ |
|
Unaudited, £ |
|
Audited, £ |
ASSETS |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
Property plant and equipment |
|
586 |
|
18,300 |
|
15,520 |
Investments in associates and joint ventures |
6 |
2,764,191 |
|
1,787,848 |
|
3,585,757 |
Available-for-sale financial assets |
7 |
1,249,980 |
|
1,230,229 |
|
1,443,707 |
Exploration assets |
|
40,402 |
|
244,985 |
|
40,402 |
Trade and other receivables |
|
1,653,388 |
|
1,197,580 |
|
1,239,779 |
Total non-current assets |
|
5,708,547 |
|
4,478,942 |
|
6,325,165 |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
38,473 |
|
93,630 |
|
9,176 |
Trade and other receivables |
|
305,372 |
|
331,621 |
|
116,544 |
Total current assets |
|
343,845 |
|
425,251 |
|
125,720 |
|
|
|
|
|
|
|
TOTAL ASSETS |
|
6,052,392 |
|
4,904,193 |
|
6,450,885 |
|
|
|
|
|
|
|
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EQUITY AND LIABILITIES |
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|
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Equity attributable to owners of the parent |
|
|
|
|
|
|
Called up share capital |
8 |
1,905,163 |
|
1,885,272 |
|
1,904,933 |
Share premium account |
|
19,287,043 |
|
17,875,960 |
|
19,272,873 |
Other reserves |
|
472,679 |
|
493,914 |
|
895,947 |
Retained earnings |
|
(16,374,292) |
|
(16,084,194) |
|
(16,795,589) |
Total Equity |
|
5,290,593 |
|
4,170,952 |
|
5,278,164 |
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Trade and other payables |
|
193,048 |
|
465,237 |
|
401,634 |
Short term borrowings |
|
568,751 |
|
268,004 |
|
771,087 |
Total current liabilities |
|
761,799 |
|
733,241 |
|
1,172,721 |
|
|
|
|
|
|
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TOTAL EQUITY AND LIABILITIES |
|
6,052,392 |
|
4,904,193 |
|
6,450,885 |
|
|
|
|
|
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|
The accompanying notes form an integral part of these financial statements.
Consolidated statement of income
for the period ended
|
Notes |
6 months to |
|
6 months to |
|
|
Unaudited, £ |
|
Unaudited, £ |
|
|
|
|
|
Revenue |
|
|
|
|
Management services |
|
- |
|
42,000 |
Gain/(loss) on sale of tenements |
|
- |
|
56,637 |
|
|
- |
|
98,637 |
|
|
|
|
|
Administrative expenses |
3 |
(257,515) |
|
(306,548) |
Gain on dilution of interest in associate |
|
- |
|
3,295 |
Impairment of investment in joint ventures |
6 |
(821,566) |
|
- |
Gain/(loss) on sale of investments |
7 |
1,485,611 |
|
- |
Share of gains in associates |
|
- |
|
3,265 |
Other income |
|
59,621 |
|
38,789 |
Finance costs, net |
|
(44,854) |
|
(19,600) |
Profit /(loss) for the period before taxation from continuing operations |
|
421,297 |
|
(182,162) |
Tax expense |
|
- |
|
- |
Profit /(loss) for the period after taxation from continuing operations |
|
421,297 |
|
(182,162) |
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
Profit /(loss) per share - basic |
4 |
|
|
|
Profit /(loss) per share - diluted |
4 |
|
|
|
The accompanying notes form an integral part of these financial statements.
Consolidated statement of comprehensive income
for the period ended
|
|
6 months to |
|
6 months to |
|
|
Unaudited, £ |
|
Unaudited, £ |
|
|
|
|
|
|
|
|
|
|
Profit /(loss) for the period |
|
421,297 |
|
(182,162) |
Revaluation of available for sale investments |
|
(335,700) |
|
(2,231) |
Group's share of associates' other comprehensive (expense)/ income |
|
- |
|
143,174 |
Unrealised foreign currency gain/(loss) arising upon retranslation of foreign operations |
|
(95,193) |
|
(36,667) |
Total comprehensive loss for the period |
|
(9,596) |
|
(77,886) |
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|
|
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The accompanying notes form an integral part of these financial statements.
Consolidated statement of changes in equity
for the period ended
The movements in equity during the period were as follows:
|
Share capital |
Share premium account |
Retained earnings |
Other reserves |
Total equity |
|
£ |
£ |
£ |
£ |
£ |
As at |
1,872,522 |
17,399,710 |
(15,902,032) |
324,638 |
3,694,838 |
Changes in equity for 2016 |
|
|
|
|
|
Total comprehensive (loss)/income for the period |
- |
- |
(182,162) |
104,276 |
(77,886) |
Transactions with owners |
|
|
|
|
|
Issue of shares |
12,750 |
497,250 |
- |
- |
510,000 |
Share issue and fundraising costs |
- |
(21,000) |
- |
- |
(21,000) |
Share-based payment transfer |
- |
- |
- |
65,000 |
65,000 |
Total Transactions with owners
|
12,750 |
476,250 |
- |
65,000 |
554,000 |
As at |
1,885,272 |
17,875,960 |
(16,084,194) |
493,914 |
4,170,952 |
|
|
|
|
|
|
As at |
1,904,933 |
19,272,873 |
(16,795,589) |
895,947 |
5,278,164 |
Changes in equity for 2017 |
|
|
|
|
|
Profit/ (loss) for the period |
- |
- |
421,297 |
- |
421,297 |
Other comprehensive (loss)/income for the period |
- |
- |
- |
(430,894) |
(430,894) |
Transactions with owners |
|
|
|
|
|
Issue of shares |
230 |
14,170 |
- |
- |
14,400 |
Share issue and fundraising costs |
- |
- |
- |
- |
- |
Share-based payment transfer |
- |
- |
- |
7,625 |
7,625 |
Total Transactions with owners
|
230 |
14,170 |
- |
7,625 |
22,025 |
As at |
1,905,163 |
19,287,043 |
(16,374,292) |
472,679 |
5,290,593 |
|
|
|
|
|
|
|
Available-for-sale investments reserve |
Associate investments reserve |
Share-based payments reserve |
Foreign currency translation reserve |
Total other reserves |
|
£ |
£ |
£ |
£ |
£ |
As at |
267,004 |
(410,439) |
22,945 |
445,128 |
324,638 |
Changes in equity for 2016 |
|
|
|
|
|
Total comprehensive income/(loss) for the period |
(2,231) |
143,174 |
- |
(36,667) |
104,276 |
Transaction with owners |
|
|
|
|
|
Share-based payment transfer |
- |
- |
65,000 |
- |
65,000 |
As at |
264,773 |
(267,265) |
87,945 |
408,461 |
493,914 |
|
|
|
|
|
|
As at |
326,097 |
- |
65,857 |
503,993 |
895,947 |
Changes in equity for 2017 |
|
|
|
|
|
Total comprehensive income/(loss) for the period |
(335,700) |
- |
- |
(95,193) |
(430,893) |
Transaction with owners |
|
|
|
|
|
Share-based payment transfer |
- |
- |
7,625 |
- |
7,625 |
As at |
(9,603) |
- |
73,482 |
408,800 |
472,679 |
Consolidated statement of cash flows
for the period ended
|
Note |
6 months to |
|
6 months to |
|
|
Unaudited £ |
|
Unaudited £ |
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
Profit /(loss) before taxation |
|
421,297 |
|
(182,162) |
(Increase)/decrease in receivables |
|
(601,465) |
|
17,926 |
(Decrease) in payables |
|
(208,584) |
|
(153,903) |
Impairment in JVs |
6 |
821,566 |
|
- |
Share based payments charge |
|
22,025 |
|
65,000 |
Share of gains in associates |
|
- |
|
(3,265) |
Broker's fee received in Curzon Energy Plc's shares |
|
(28,000) |
|
- |
Reversal of prior year impairment |
|
(21,614) |
|
- |
Interest payable |
|
44,854 |
|
19,600 |
Currency adjustments |
|
- |
|
(49,771) |
Loss on dilution of interest in associates |
|
- |
|
(3,295) |
Gain on sale of available-for-sale investments |
7 |
(1,485,611) |
|
- |
(Gain)/loss on sale of tenements |
|
- |
|
(56,638) |
PPE write off/Depreciation |
|
14,934 |
|
3,417 |
Net cash flows from operations |
|
(1,020,598) |
|
(343,091) |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
Proceeds from sale of available-for-sale investments |
|
1,719,126 |
|
58,939 |
Payments to acquire available-for-sale investments |
|
(400,000) |
|
(85,000) |
Exploration payments |
|
- |
|
(284) |
Net cash flows from investing activities |
|
1,319,126 |
|
(26,345) |
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Proceeds from issue of shares |
|
- |
|
510,000 |
Transaction costs of issue of shares |
|
- |
|
(21,000) |
Interest paid |
|
(44,854) |
|
(19,600) |
Repayment of borrowings |
|
(224,377) |
|
(14,294) |
Net cash flows from financing activities |
|
(269,231) |
|
455,106 |
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
29,297 |
|
85,670 |
|
|
|
|
|
Cash and cash equivalents at the beginning of period |
|
9,176 |
|
7,960 |
Cash and cash equivalents at end of period |
|
38,473 |
|
93,630 |
|
|
|
|
|
Half-yearly report notes
for the period ended
1 |
Company and Group |
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As at
|
|
The Company will report again for the full year ending
The financial information contained in this half yearly report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the year ended |
2 |
Accounting Polices |
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Basis of preparation |
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The consolidated interim financial information has been prepared in accordance with IAS 34 'Interim Financial Reporting'. The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended
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3 |
Administrative expenses
|
4 |
Loss per share |
|
|
|
|
The following reflects the profit/(loss) and share data used in the basic and diluted profit/(loss) per share computations: |
|
|
6 months to 31 December 2017 |
|
6 months to 31 December 2016 |
||||
|
|
Unaudited, £ |
|
Unaudited, £ |
||||
|
|
|
|
|
||||
|
Profit/(loss)/profit attributable to equity holders of the parent company |
421,297 |
|
(182,162) |
||||
|
|
|
|
|
||||
|
Weighted average number of Ordinary shares of |
576,805,818 |
|
305,950,145 |
||||
|
Effect of dilutive options |
5,330,000 |
|
- |
||||
|
Weighted average number of Ordinary shares of |
582,135,818
|
|
305,950,145 |
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|
|
|
|
|
||||
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(Loss)/profit per share - basic |
|
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|
||||
|
|
|
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|
||||
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(Loss)/profit per share - fully diluted |
|
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|
||||
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|
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||||
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Options and warrants with all conditions met, that were also in the money at the end of each respective period:
|
|||||||
|
|
6 months to 31 December 2017 |
|
6 months to 31 December 2016 |
||||
|
|
Unaudited, £ |
|
Unaudited, £ |
||||
|
|
|
|
|
||||
|
Share options granted to employees, fully vested and in the money at the end of the respective period |
5,330,000 |
|
- |
||||
|
Warrants given to shareholders as a part of placing equity instruments, fully vested and in the money at the end of the respective period |
- |
|
17,898,183 |
||||
|
Total instruments fully vested and in the money |
5,330,000 |
|
17,898,183 |
||||
|
|
|
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|
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At
|
|||||||
|
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|
Options and warrants with conditions not met at the end of the period, that could potentially dilute basic EPS in the future, but were not included in the calculation of diluted EPS because they are anti-dilutive for the periods presented:
|
|||||||
|
|
6 months to 31 December 2017 |
|
6 months to 31 December 2016 |
||||
|
|
Unaudited, £ |
|
Unaudited, £ |
||||
|
|
|
|
|
||||
|
Share options granted to employees - not vested and/or out of the money |
21,730,000 |
|
7,060,000 |
||||
|
Warrants given to shareholders as a part of placing equity instruments - not all conditions met and/or out of the money
|
236,685,670 |
|
138,611,111 |
||||
|
Total options and warrants with not all conditions met and/or out of the money |
258,415,670 |
|
145,671,111 |
||||
|
|
|
|
|
||||
|
Total number of instruments in issue not included into the fully diluted EPS calculation |
258,415,670 |
|
163,569,294 |
||||
Half-yearly report notes
for the period ended
5 |
Segmental analysis |
|
Since the last annual financial statements the Group has not made any changes or additions to how it measures its segmental results. |
|
|
Investment in Red Rock Resources plc |
Other investments |
Australian exploration |
exploration |
Corporate and unallocated |
Total |
|
For the 6 month period to |
£ |
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
|
Management services |
- |
- |
- |
- |
- |
- |
|
Revenue |
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
Result |
|
|
|
|
|
|
|
Segment results |
- |
- |
(3,644) |
- |
469,795 |
466,151 |
|
Loss before tax and finance costs |
|
|
|
|
|
466,151 |
|
|
|
|
|
|
|
|
|
Interest receivable |
|
|
|
|
|
- |
|
Interest payable |
|
|
|
|
|
(44,854) |
|
Loss for the period before taxation |
|
|
|
|
|
421,297 |
|
|
|
|
|
|
|
|
|
Taxation expense |
|
|
|
|
|
- |
|
Loss for the period after taxation |
|
|
|
|
|
421,297 |
|
|
|
|
|
|
|
|
|
|
Investment in Red Rock |
Other investments |
Australian exploration |
exploration |
Corporate and unallocated |
Total |
|
For the 6 month period to |
£ |
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
|
Management services |
- |
- |
- |
- |
42,000 |
42,000 |
|
Revenue |
- |
- |
(56,637) |
- |
- |
(56,637) |
|
|
|
|
|
|
|
|
|
Result |
|
|
|
|
|
|
|
Segment results |
6,560 |
- |
35,985 |
- |
(303,744) |
(261,199) |
|
Loss before tax and finance costs |
|
|
|
|
|
(162,562) |
|
|
|
|
|
|
|
|
|
Interest receivable |
|
|
|
|
|
- |
|
Interest payable |
|
|
|
|
|
(19,600) |
|
Loss for the period before taxation |
|
|
|
|
|
(182,162) |
|
|
|
|
|
|
|
|
|
Taxation expense |
|
|
|
|
|
- |
|
Loss for the period after taxation |
|
|
|
|
|
(182,162) |
|
|
|
|
|
|
|
|
|
A measure of total asset and liabilities for each segment is not readily available and so this information has not been presented. |
Half-yearly report notes
for the period ended
6 |
Investments in associates and joint ventures |
|
||
|
|
Unaudited £ |
31 December 2016 Unaudited £ |
30 June 2017 Audited £ |
|
At the beginning of the period |
3,585,757 |
1,638,113 |
1,638,113 |
|
Additions |
- |
190,616 |
1,928,132 |
|
Gain on re-translation into group presentation currency |
- |
- |
60,393 |
|
Transferred to available-for-sale investments |
- |
(40,881) |
(40,881) |
|
Impairment |
(821,566) |
- |
- |
|
At the end of the period |
2,764,191 |
1,787,848 |
3,585,757 |
As a result of the Group's evaluation of its non-financial assets, an impairment loss of
The Directors recognise that
Simultaneously, the Company is exploring options to potentially inject some of its metallurgical coal investments into the joint venture with Legacy Hill Resources first announced on
Given the broad uncertainty around the future of these assets, the fact that the metallurgical coal market remains buoyant and the original investment thesis sound with multiple potential pathways for future development, an impairment value of
7 |
Available-for-sale financial assets |
|
||
|
|
Unaudited £ |
31 December 2016 Unaudited £ |
30 June 2017 Audited £ |
|
At the beginning of the period |
1,443,707 |
1,147,457 |
1,147,457 |
|
Additions |
936,502 |
44,122 |
145,127 |
|
Disposals |
(1,166,442) |
- |
- |
|
Revaluations |
14,598 |
(2,231) |
110,242 |
|
Reversal of impairment |
21,614 |
- |
- |
|
Transfer from investments in associates |
- |
40,881 |
40,881 |
|
At the end of the period |
1,249,979 |
1,230,229 |
1,443,707 |
In August 2017 the Company disposed of 1.9% of its stake in Horse Hill Developments Ltd ("HHDL") to
On 29 November 2017, Regency announced that it has completed the sale to dispose of its remaining 3.1% interest in HHDL for £630,000, of which 50% would was delivered in cash and 50% in shares of the buyer, Alba Mineral Resources plc ("Alba").
Half-yearly report notes
for the period ended 31 December 2017, continued
8 |
Share Capital of the company |
|
The share capital of the Company is as follows: |
|
|
Number |
|
Nominal, £ |
|
|
|
|
|
|
Allotted, issued and fully paid |
|
|
|
|
As at 30 June 2017 |
576,491,064 |
|
1,904,933 |
|
|
|
|
|
|
Issued 6 December 2017 at 0.625 pence per share in relation to SIP |
2,304,000 |
|
230 |
|
|
|
|
|
|
At 31 December 2017 |
578,795,064 |
|
1,905,163 |
|
|
|
|
|
9 |
Capital Management |
|
Management controls the capital of the Group in order to control risks, provide the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern. The Group's debt and capital includes ordinary share capital and financial liabilities, supported by financial assets. There are no externally imposed capital requirements. Management effectively manages the Group's capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues. There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.
|
Half-yearly report notes
for the period ended 31 December 2017, continued
10 Subsequent events
ESTEQ Investment into Whitecar Ltd.
On 22 December 2017 the Company announced that its wholly owned subsidiary, EsTeq Ltd, had agreed to invest £400,000 into Whitecar Ltd, in two tranches, one at closing and a further in February 2018. In February 2018 EsTeq completed the terms of this investment by investing the second £200,000 tranche into Whitecar Ltd, bringing the total invested to £400,000 and its shareholding to 5.8% of Whitecar.
Strategic Fundraising and Loan Repayment
On 11 January 2018 the Company raised £1,050,000 through the issuance of 190,909,090 new ordinary shares of 0.01 pence each. Each participant in the placing received a warrant along with each share purchased to subscribe for a further share at 1.0 pence for 24 months. The Company retains the ability to call these warrants in the event that the volume weighted average price of the Company's shares equals or exceeds 3.5 pence for ten consecutive business days.
On 30 January 2018 the Company further announced that it had repaid in full all of its outstanding convertible loan notes with YA II PN, Ltd. This payment totalled $835,115 and was broken down into $725,647 of principal and $33,548 of interest.
Joint Venture with Legacy Hill Resources
On 27 February 2018 the Company announced that it had executed a joint venture agreement with Legacy Hill Resources ("LHR"), a privately-owned mining company, setting out a framework for cooperation. The purpose of the joint venture was to structure and finance acquisitions in the
Under the terms of the joint venture, LHR will own 30% of the joint venture, to reflect their efforts in financing, conducting due diligence and managing the acquisition process to date. LHR will contribute $1m in cash and Regency will contribute up to $2m in cash, with the total equity contributions under this agreement capped at $3m. Regency will thereby hold a proportion of the joint venture equal to 70% of its relative cash contributions. If more than $3m of cash investment was required, a new agreement would be entered into for that additional amount. LHR was to be responsible for day to day operations of the investments and all these terms and relationships were to be formalized in a full agreement when appropriate.
Update on Rosa Mine Due Diligence
On 27 February 2018 the Company announced that alongside Legacy Hill Resources due diligence had been carried out on the Company's option to acquire 80% of the Rosa metallurgical coal mine and wash plant not already owned by Regency. While the original sixty-day timeline had expired, Regency was continuing to review information gathered on the Rosa mine, to reach out and speak with stakeholders, and to discuss additional partnership options regarding this asset with Legacy Hill Resources. The Company further explained that the eventual terms of any potential transaction regarding Rosa might require additional negotiation and would likely be different than those originally announced.
For further information contact:
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
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