5 Apr 2017 15:36
REGENCY MINES PLC
("Regency" or the "Company")
Convertible Loan
5 April 2017
Regency Mines plc announces that it has raised an unsecured US$1,000,000 ($900,000 net of fee) one year convertible loan bearing interest at 12% (the "Loan"). The lender is YA II PN, Ltd, a company incorporated in the Cayman Islands (the "Lender").
The Lender may convert any part of the Loan by giving a conversion notice (a "Conversion") at any time during the next twelve months into the Company's ordinary shares ("Shares") at the lower of a fixed conversion price ("Fixed Conversion Price") of 1.155 pence per share and a variable conversion price ("Variable Conversion Price") subject to the following provisions:
a) There is no restriction on the amount of the Loan that may be converted at the Fixed Conversion Price, and the Lender may elect to convert at this price whether the price of Shares is above or below the Fixed Conversion Price;
b) If the price of Shares is below the Fixed Conversion Price the Lender may elect to convert at the Variable Conversion Price, but if it does so it is restricted to Conversion of a maximum of $200,000 in any one month;
c) The Variable Conversion Price means 90 per cent. of the lowest daily volume-weighted average price at which the Shares have traded in the 5 trading days prior to each Conversion;
d) If the price of Shares is below the Fixed Conversion Price Regency may prepay subject to a pre-payment fee equal to 20 per cent. of any amount prepaid.
Regency would expect to exercise the prepayment option in the event of a fall in price to significantly below the Conversion Price.
The purpose of the Placing is to enable the Company to develop its U.S. operations and to retire the entirety of its $381,625.21 existing debt.
Andrew Bell, Chairman of Regency Mines, comments: "This facility diversifies our funding, achieves a better currency match between our liabilities and our revenue streams, and retires existing debt. If the share price remains strong as we anticipate then the effect is likely to be similar to that of an equity funding, without warrants, at 1.15 pence per share.
In analysing this facility the Board considers the value creation potential of the Company's rapidly expanding coal assets in the United States to significantly outweigh the cost of capital paid to investors, and notes that the Lender will have a direct interest in the Company's share price performance over the next year. We look forward to these funds directly impacting the Company's bottom line and future share price performance."
Background
Regency has interests including coal bed methane and oil exploration, and is now bringing into production metallurgical coal projects in the Appalachian coal belt in the Eastern United States. The Appalachians have long been one of the world's largest sources of coal, and some areas contain high quality metallurgical coals.
Regency has three coal projects, one already operating and where commercial production is about to begin, and one where production is expected within three months.
Elsewhere, Regency controls large resources of nickel, cobalt and tantalum/niobium.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information, please 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 0129 351 7744 Broker Dowgate Capital Stockbrokers Ltd.