RGM.L Regulatory News (RGM)

Regency Mines PLC

("Regency" or the "Company")

Corporate Update

11 March 2019

Regency Mines Plc (LON: RGM) the natural resource exploration and development company with interests in hydrocarbons, energy storage and battery metals announces a corporate update.

Overview

Following the Company's annual general meeting ("AGM") concluded on 25 February 2019, the Directors were given the authority to issue 500,000,000 new ordinary shares, but were not provided with the authority from shareholders to disapply pre-emption rights over any issuance that might occur.

The current business model of Regency along with that of most other junior exploration companies in the small-cap space relies on the ability to access capital by the issuance of new shares to investors to fund ongoing working capital and project development requirements.

The defeat of resolution 5 in the recent AGM and lack of associated pre-emption rights has largely removed this access to capital and as such the Board has been in discussions with various stakeholders concerning the ongoing requirements of the business, which include both operational and financial obligations. These discussions currently remain ongoing.

Mining Equity Trust LLC ("MET") - US Coal Operations

In Virginia, MET, the Company's 47% owned associate continues to operate the Omega coal asset. Figures for total coal sales (tons) including third party sales as well as top level revenue figures since the MET joint venture commenced operations in August 2018 are presented here:

The total coal sold during this period represents approximately 49% of the totals originally planned and the revenues during this period represent roughly 43% of original projections made by the joint venture operators for this period. These variances have come to exist due to a variety of financial and operational factors that developed during and after the joint venture partners took control of the Omega assets.

In particular, a failure to agree and borrow the level of originally expected debt funding for the MET joint venture purchase of Omega caused a slow cascade of operational pressure and financial distress to appear in the business. This ultimately resulted in one of the two highwall miners being temporarily idled, with the expected associated reduction in the levels of coal production.

These operational deficiencies have now largely been rectified as can be seen in the increasing levels of coal production and associated revenue in 2019 to date. However, Regency has been made aware by its JV partners that an immediate requirement for additional working capital of approximately $400,000-500,000 currently exists, and that additional sums may be required over the next six months in order to complete the full purchase of Omega as well as to replenish depleted working capital. Immediate funding is required to restart the second highwall miner and to reduce key creditor obligations that have built up during the periods of reduced production towards the end of 2018.

Regency's general inability to access the capital markets since the 25th of January 2019 has further exacerbated this situation, with Regency's capital contributions to the project having fallen behind that of its JV partners. The Company currently estimates that a deficit funding situation with its JV partners of approximately $565,000 thus currently exists. Regency's ability to support its obligated share of required investments into MET remains uncertain over the short term.

The joint venture operators of the asset now believe that as a result of operational and managerial changes on the ground in Virginia a corner has been turned and that production levels are trending back to the levels originally anticipated post acquisition at Omega. A successful resumption of full-scale operations would allow MET to focus on upgrading the Omega asset to potentially include the addition of a wash plant as well as the consideration of supplementary assets designed to increase both total production and profit margins through increasing sales of metallurgical grade coal as well as to achieve greater efficiencies of scale across the business.

The Company has further been seeking external advice from a reputable coal industry expert with an established track record of US coal operations and this individual has expressed interest that he may be available to join the Company in some capacity pending a satisfactory go-forward plan is put in place at both the Regency and MET operational levels.

Financial Situation

Following the announcement of 14 January 2019, the Company has been in ongoing discussions with the group of institutional investors regarding several payments that may be due under the terms of the Company's existing loan note. The Company's potential inability to meet these payments may require additional restructuring of its debt load and could result in the Company forfeiting control of its interests in MET and the US coal operations, as these assets have been pledged as collateral to the Company's lenders.

Furthermore, the Company has considered the possibility of running an open offer or related style of placing using its current authorization and the feedback from the Company's legal and financial advisors is that this is likely to be possible only at significant expense in both time and cost and so is unlikely to be able to meet the Company's short-term requirements. An open offer may however be viable as part of a larger restructuring of the Company's balance sheet and capital structure over the coming weeks.

These discussions remain ongoing and additional announcements will be made as required.

It should be noted that whilst the Board remains in constructive discussions with all of its stakeholders, no positive outcome is assured at this time. The priority of the Directors is to ensure the future success of the Company and its ability to support the development of those of its diverse assets and interests it ultimately determines to be core and sustainable. The Company further intends to announce both managerial changes and a strategic review of its entire portfolio following a successful resolution of its current funding requirements.

For further information, please contact:

Scott Kaintz 0207 747 9960 Director Regency Mines Plc

Roland Cornish/ Rosalind Hill Abrahams 0207 628 3396 NOMAD Beaumont Cornish Limited

Jason Robertson 0207 374 2212 Broker First Equity Limited