Regency Mines (LON:RGM) has reached agreement to invest in Direct Nickel (DNi) and jointly finance an exploration programme at the Mambare lateritic nickel/cobalt project in Papua New Guinea.
Regency has agreed to subscribe for a new issue of shares by DNi on the same terms as in DNi's last funding round and value DNi at US$75 million.
Regency's investment will be for a total amount of US$6 million in two equal tranches of US$3 million.
The consideration will be settled by the issue of new shares in Regency at a price equivalent to the volume weighted average share price in the five trading days up to and the five trading days after 18 November 2010.
Shares in Regency last traded at 9.6 pence.
In early November Regency announced a joint venture (JV) with DNi.
The parties agreed to co-operate on a 50/50 basis in the piloting and application of DNi's advanced nickel/cobalt leaching technology at Regency's Mambare lateritic nickel project in Oro Province, Papua New Guinea.
The exploration and drill programme were revised due to “changing market conditions and nickel price developments” coupled with new geophysics flown over the Mambare area earlier this year.
The JV has prepared an initial £1.5m drill programme.
The company also reported on a £1.5 million investment by its 20.96% associated company Red Rock Resources (LON:RRR) in the PLUS listed Ascot Mining.
Regency and DNi have agreed that they will each contribute £1 million to the next phase of exploration at Mambare, which will start immediately.
Last Thursday, Regency announced the start of an 837 line kilometre programme of airborne geophysics this week on some of its Western Australian licenses, and that it started preparatory exploration at Bundarra in Queensland.
Last week, Oracle Coalfields (PLUS:ORC) announced that it will receive £1 million from Regency in return for a 10.04 per cent stake in the company which is developing a 1.4 billion tonne JORC measured lignite coal project in Pakistan's Sindh Province. Oracle also plans to plans to list on AIM in the first half of 2011.