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Regency Mines to focus on battery metals as Parsons takes over

Snapshot

US coal and oil and gas assets have been put up for sale

coal

Quick facts: Regency Mines PLC

Price: 2.875 GBX

LSE:RGM
Market: LSE
Market Cap: £2.57 m
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  • Regency to regroup around battery metals and UK energy storage
  • Coal and US gas assets for sale
  • New management team led by former Sound Energy boss James Parsons

How it’s doing

In December, James Parsons, the former chief executive of Sound Energy announced he was to take over at Regency Mines PLC (LON:RGM) and help fund its push into battery metals.

A placing will raise £831,000 as a part of a refinancing of the business with C4 Energy, a new company part-controlled by Parsons also granted an option to acquire Regency's debt.

Outstanding promissory notes and convertible loans are being restructured and exchanged into new loans of £729,000 and shares equal to around 82% of the share capital.

The new loans will run for two years at an 8% coupon with no conversion rights for holders YA and Riverfort.

Red Rock Resources PLC (LON:RRR) will also receive shares in exchange for £146,000 worth of obligations.

Following completion, Regency intends to consolidate its shares on a 100 into one basis

Going forward, the main mining assets will be the Mambare nickel-cobalt project in Papua New Guinea, and a 50% interest in the Dempster vanadium project in the Yukon, Canada,

In the UK, work is currently underway on a single large development site near Liverpool, where two potential stages of development are envisioned under the name of the Southport Energy Centre.

What the boss says: James Parsons, executive chairman designate

 “I have been messaging for some time my plan to go back to those micro-cap roots and launch a new vehicle, building on those skills, the learnings of the past and our connectivity to cornerstone investors. 

 “Regency Mines PLC (LON:RGM) is my chosen company….. it fits on multiple levels including thematically as the world transitions to electric vehicles and a lower carbon economy and therefore requires investment in batteries and specifically battery metals to enable that.    

“Regency provides now, post the recent financial restructuring, I believe, the right entry point for myself and my investors. 

 “It has a diverse legacy new energy portfolio, including the Mambare battery metals project in PNG where I see previously hidden value, and is operating in a sector with strong core growth and huge opportunity.

  “I’m not here to pretend Regency’s history isn’t a little “messy” but I see opportunity from this starting point, and I intend to spend the coming years building this company as an executive through a blend of organic development and acquisition. 

“I believe battery metals however are a critical part of our future. Despite some short-term price uncertainty largely driven by the ongoing US/China trade war, the battery metals market still represents one of the fastest-growing sectors within the broader energy markets.

“Raw material demand for cobalt and nickel remain strong and we are already seeing the adoption of Electric Vehicles forecast to increase hugely – I believe they are forecasting over 30% by 2040.

“Even within the renewables sector, we are seeing increasing demand for larger batteries to store energy and ease pressure on power grids by levelling out supply / demand imbalances.”

Inflexion points

  • Sale of coal and oil and gas assets
  • Transaction with James Parsons completes
  • Details of how business will move forward once refinancing goes through

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Watch

Regency Mines putting foundations in place for 'development and value'

Regency Mines PLC's (LON:RGM) Scott Kaintz and Ewen Ainsworth join Proactive's Andrew Scott in the London studio to discuss the recent refinancing of the firm's debt facility as well as the findings of the strategic review. Regency's refinanced US$1.254mln worth of loan notes through to July...

on 1/8/19

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