RGM.L Regulatory News (RGM)

13 Sep 2006 14:45

Regency Mines PLC13 September 2006 REGENCY MINES PLC Exploration Update - Nickel Dated: 13 September 2006 Regency Mines plc (the "Company" or "Regency"), the mining exploration andmineral investment company with interests in copper and nickel in WesternAustralia, Queensland, and Papua New Guinea, announces the results of itspreliminary exploration programme at its lateritic nickel project at Mambare,Papua New Guinea. The laterite bearing nickel potential of the Mambare Plateau, some 2 to 20kilometres north of Kokoda has been explored intermittently since 1960. Kokodaand Mamba Estate to the southwest of Mambare Plateau are linked to Popondettaand Oro Bay by gravel at first and sealed road. The Company through a local 75%owned subsidiary holds the exploration rights to Mambare Plateau within EL 1390,which was granted over 584 sq km for a 2 year period on June 10, 2005. The Mambare Plateau is an elevated 20 by 7 kilometre old land surface west ofthe Ajule-Kajale Range, developed on tectonite ultramafics. To the east, theseultramafics are overlain by gabbroic rocks and submarine basaltic volcanics. Previous exploration was conducted by several companies in the 1960's, includingthe Bureau of Mineral Resources, Homestake-Hanna Syndicate, Amax Mining(Australia) Inc., Southern Mining & Development Co. Ltd. and PNG Nickel Ltd.Exploration consisted of pitting and hand augering with at least one bulldozertrench being dug. Between 1960 and 1971, 240 Auger holes were drilled, and 56pits and one costean dug. In 1999 Anaconda Nickel Ltd reviewed the data over a158 sq km area of the Mambare Plateau and estimated two limonite resourcepotentials: 630 Mt at 0.78% nickel with a 0.5% cut-off and 200 Mt at 1.01%nickel with a 0.8% cut-off. The auger drilling across the Mambare Plateau indicates a profile of: 3-5m of ash; 3-6m of low grade limonite laterite; 3-6m of limonite ore grading 0.9 to 1.1% nickel (+0.1% cobalt); and 4m of saprolite ore grading at least 1.15% nickel. The pits on the Arumu Slopes indicate a similar profile of: 3-6m of ash; 0-2m of low grade limonite laterite; 4m limonite ore; and 4m of saprolite ore. This profile is best illustrated by pit KR 022 which has a profile of; 3m of ash; 3.66m of limonite ore grading 1.05% nickel (and 0.12% cobalt) 4.55m of saprolite ore grading 1.25% nickel. The current programme consisted of creating a data base of the historical datawith ground truthing. The line of pits sunk along the Ukita Ridge in 1962 werelocated, surveyed into the AMG 66 grid using a GPS and re-sampled. The pits onNamara - Karati Ridge were located and surveyed into the AMG 66 grid. Severalof the pits dug by Amax from the 1968 programme on the southern slopes of theMambare Plateau were also located and surveyed into the AMG 66 grid. This surveying has allowed correction of the calculated co-ordinates of the pitsand the auger holes so they are properly plotted on the published topographicbase with the AMG 66 grid. The samples from the ten re-sampled shallow pits were assayed in Djakarta by PTIntertek Utama Services using the XRF technique. Elements assayed includenickel, cobalt along with Al203, CaO, Cr2O3, Fe2O3, K2O, MgO, MnO, Na2O, P2O5,TiO2 & LOI. There was good correlation with previous results, with 19 of the 48samples grading over 0.8% nickel and 11 grading over 1% nickel. A ground magnetometer traverse was completed up the Arumu Slopes onto theMambare Plateau over a distance of 3300 metres, with individual readings every25metres. Seven helipads were cleared to afford helicopter access in the near future. The 1971 sampling, and that carried out this season, tested systematically forcobalt and the data indicate that over 500 ppm Co is very common in themineralized limonite sections, with one re-sampled hole grading 0.12%.Compilation by Anaconda indicates that the Plateau and its slopes have thepotential to host +200 Mt of limonite ore grading 1% nickel. To this resourcethe cobalt potential of approximately 0.1% can also be added. The augerdrilling and pitting did not intersect much of the underlying and generallyhigher grade saprolite ore. This resource potential may be similar to that ofthe limonite ore and can also be added to the potential indicated by Anaconda. This resource potential can be summarised as: Limonite Ore 200 Mt of 1% nickel and 0.1% cobalt and Saprolite Ore 200 Mt of 1.25-1.5% nickel. Much of the previous auger drilling and pitting were too shallow to testadequately the limonite ore, and in many cases failed to encounter the saproliteore or ended in mineralization. The potential resource needs to be furtherevaluated with diamond drilling to test both this limonite ore and theunderlying poorly tested saprolite ore. The underlying saprolite ore issuggested to be as thick as the overlying limonite ore. Geophysical techniquessuch as magnetics and ground penetrating radar may help better definition ofbedrock rock types and thickness of laterite profiles. The large size of the 20 km by 5-7 km Mambare Plateau, compared with the 7 km by2-3 km envelope of known mineralization at the nearby Wowo Gap, gives a largepotential area of mineralization and the possibility of a significant resource. Glossary Laterites: clays including limonite and saprolite formed by intense weatheringof the rock, typically in humid climates, from which all soluble material havebeen dissolved, leaving behind insolubles such as iron and aluminium. Limonite: (FeO(OH)), an amorphous, hydrated iron oxide, dark brown to black, ofsupergene origin. Supergene enrichment: Where circulating ground waters remobilise metaliferouselements from a superficial deposit, to form concentrated ore bodies below thewater table. Saprolite: clay rich red or brown totally decomposed rock, formed in situ bychemical weathering of igneous or metamorphic rocks. Declaration The technical information in this announcement is based on information compiledby Graham L Rolfe, a consulting geologist to Red Rock, who is a member of theAustralasian Institute of Mining and Metallurgy. Graham Rolfe has extensiveexperience relevant to the style of mineralisation and type of deposit underconsideration. Graham Rolfe consents to the inclusion in this announcement ofthe matters based on his information in the form and context in which itappears. Enquiries: Andrew Bell 0207 402 4580 or 07766 474849Regency Mines plcChairman Ron Marshman / John Greenhalgh 0207 628 5518City of London PR John Simpson 0207 512 0191ARM Corporate Finance LtdNominated Adviser Updates on the Company's activities are regularly posted on Red Rock's website,www.rrrplc.com. This information is provided by RNS The company news service from the London Stock Exchange