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Regency Mines gives update on Mambare joint venture

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Copper and nickel explorer Regency Mines (LON:RGM) today updated details of the joint venture agreement it made with Sydney based Direct Nickel (DNi).

The agreement is to pilot and apply DNi’s advanced nickel/cobalt leaching technology at Regency’s Mambare lateritic nickel deposit in Papua New Guinea (BMNLP) and it was initially announced in November 2009.

Now, a new joint venture called Oro Nickel Ltd (ONV), with Regency and DNi each owning 50 percent, will take the project forward.

The new company's assets are a non-exclusive 20 year licence from DNi for lateritic treatment technology capped at 40,000 tpa of nickel in concentrate with options to increase to 90,000 tpa of nickel in concentrate, together with the right to a further licence for any agreed additional project.

The options are exercisable subject to an approved DFS and on successful commissioning of the plant by ONV, said Regency.

Under the purchase and sale agreement, Regency will be entitled to a gross smelter return royalty of 1 per cent on sales revenue from the BMNLP.

Also announced today was that DNi and Regency have signed a shareholding and funding agreement, which will govern JV activities through ONV and replace the provisions of previous letter agreements and other arrangements.

The project manager will be a person nominated by DNi and approved by Regency, said the firm.

The company said today: "Regency welcomes this key development in advancing co-operation with its partner DNi. These agreements evidence the confidence and commitment of the partners in both the project and the technology."

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