RGM.L Regulatory News (RGM)

REGENCY MINES PLC

("Regency" or the "Company")

Direct Nickel Limited - Nickel Production Demonstration Programme declared successful

17 February 2014

Regency Mines Plc ("Regency" or the "Company"), the mining exploration and mineral investment company with interests in nickel and other minerals in Australia, Papua New Guinea and Sudan, reports, further to the announcements on 17 January 2014 and 6 December 2013, that its partner Direct Nickel Ltd ("DNi") has today announced the successful outcome of the Demonstration Programme on the DNi Process carried out between January and December 2013 at the DNi test plant in Perth, WA.

Highlights

The recently received process validation report confirms:

· Chemistry that regenerates and recycles reagents within the process

· Ability to treat limonite and saprolite ores and blends without loss in nickel recovery

· Low process intensity not requiring high temperatures or pressures

· Off-the-shelf equipment with a well-known design and scalable methodology

· No exotic materials of construction

· Low volume, benign tailings that can be disposed as landfill

· Valuable by-products of MgO and hematite

and a key metric has been confirmed:

• Processing operating costs of US$2.00 to $3.00/lb (before by-product credits)

DNi's announcement also confirms:

· Commitment to commercialisation of the new process technology

· Feasibility Study under way at Buli, Halmahera, in partnership with Indonesia's largest nickel producer ANTAM

· Planned DNi Process commercial plant to produce up to 10-20,000 tonnes per annum of nickel in concentrate

Takeaways of the Demonstration Programme

Key takeaways from the programme were:

· The DNi Process has proved to be simple and safe to operate on a continuous basis

· Metal recoveries for pay metals Ni, Co, Fe and Mg match laboratory results with +90% for Ni

· +95% recycling of nitric acid achieved

· High standards of occupational health, safety and environment demonstrated

· A working, accurate process model has been developed and verified

· Commercially available 304 stainless steel remains the construction material of choice

· Water and energy balances have been confirmed

· A simplified flowsheet has resulted in reduced processing capital costs

· Processing operating costs of US$2.00 to $3.00/lb (before credits) have been confirmed as feasible for some markets such as Indonesia

· MHP (mixed hydroxide intermediate product) grades of 32%Ni were achieved, with scope to further improve identified.

Russell Debney, DNi CEO, states: "The completion of the Nickel Production Demonstration Programme positions DNi for our first commercial plant. As importantly, its success will increase awareness of the availability of a commercially viable solution in the DNi Process to access and process nickel laterite resources."

He states: "Some of the ore for this demonstration was sourced from ANTAM's Buli operation. For the ores tested, the Demonstration Programme has shown the DNi Process has very high recoveries of nickel, and other valuable by-products such as cobalt, hematite and magnesium oxide,"

Background on DNi, ANTAM, and the DNi Process

DNi (ASX:DIR), a company in which Regency is a 7% shareholder, is the developer of the DNi Process and is the Company's joint venture partner in the Mambare nickel-cobalt laterite project in Oro Province, Papua New Guinea; a project which has a license for the DNi Process.

PT ANTAM (Persero) Tbk (IDX:ANTM; ASX:ATM) ("ANTAM") is a diversified mining company and Indonesia's largest nickel miner and operates ferronickel processing facilities in Sulawesi. Co-operation agreements between ANTAM and DNi joint venture subsidiary PT DNi were signed with ANTAM in 2012 and 2013.

The DNi Process is a hydrometallurgical process for the treatment of nickel laterites. It is designed to operate with tank leaching at atmospheric pressure, and to treat both limonite and saprolite ores with a single flowsheet. The DNi Process recycles its reagents, offer high cobalt and nickel recoveries with short residence time, and enables the treatment of nickel laterites with industry-competitive capital and operating costs. The DNi Process has the potential to add materially to the prospective value of world nickel laterite resources which receive access to the DNi Process.

The DNi Process has been developed over the past seven years and has been demonstrated over the last year at a test plant facility located in the CSIRO's Mineral Research Centre in Perth at a scale of 1 ton of ore per day. The test plant programme was completed in December 2013.

Comment

Regency Chairman Andrew Bell comments: "These long-awaited and much anticipated results are of signal importance. The advantages, in both process and economics, of the DNi Process need no longer be spoken of as hypothetical or potential, but can be described as actual.

This development comes at an opportune time for countries that wish to achieve greater value from nickel projects. Indonesia for one has banned nickel ore exports and from 2014 requires in-country processing, and others may soon follow leading to significant opportunities for DNi processing plants to be established worldwide. "

The full announcement is available to read at:

http://www.asx.com.au/asxpdf/20140217/pdf/42mrs9bvh7dbyg.pdf