RGM.L Regulatory News (RGM)

Regency Mines Plc

("Regency Mines" or the "Company")

Final Audited Results

for the Year Ended 30 June 2019

20 December 2019

A copy of the Company's Annual Report and Financial Statements for 2019, extracts from which are set out below, will be made available on the Company's website www.regency-mines.com shortly and at the Annual General Meeting to be held on 31 January 2020.

Chairman's Review

Overview

The Company presents its Annual Report and Accounts for the year to 30 June 2019.

The Company was incorporated for the purpose of pursuing development of and investment in mineral exploration projects with a particular focus on base-metals. During the course of the year, the Board refocussed this historic strategy around three core projects, the Mambare nickel-cobalt project, the Dempster Vanadium project, and the Company's investment in Allied Energy Services. These three projects provide the Company with direct exposure to exciting opportunities in natural resources and battery metals, as well as in energy storage and distributed power.

Review of the Year and Subsequent Events

The year to 30 June 2019 was a difficult and disappointing year for the Company, albeit with positive progress in a number of areas. Subject to shareholder approval on 23 December of the fundraising, debt restructuring, share consolidation and Board change proposals announced on 5 December, the Company expects to end 2019 with firm foundations and significantly brighter prospects for all stakeholders.

MET Coal - the Company invested US$2m in a joint venture company, Mining Equity Trust, LLC ("MET"), in June 2017, funded principally by a loan of US$1.6m. On 2 August 2018, MET took over the metallurgical coal operations and assets of Omega Holdings, LLC and other companies in Virginia, U.S.A. Although coal production in Virginia commenced in the same month, the failure of the joint venture to agree and borrow the level of originally expected debt led to the project running short of funds and being unable to continue production. As a result, the entire value of the Company's investment has been written off.

White Car - on a smaller scale, White Car Limited, in which the Company had invested £0.4m for a 5.6% stake through its 100% owned subsidiary EsTeq Ltd in December 2017, entered voluntary liquidation in June 2019. The full value of this investment was written off in the interim results for the 6 months to 31 December 2018.

Dempster Vanadium Project - on a more positive note, the Company acquired a 50% stake in the Dempster Vanadium exploration project, in the Yukon, Canada for CAD$0.45m, on 24 January 2019. Unfortunately, there has been little activity during the year, primarily due to funding constraints by the partners in the project. The Company plans to engage in meetings with the various partners in 2020 in order to determine the best way forward for the project, which may include an exploration programme focused on rock-chip sampling and mapping in order to develop drill-ready exploration targets.

Strategic Review - a Strategic review was announced on 15 April 2019. Following the year end, on 24 July 2019 the Company announced that the Company would be refocused around mineral interests in nickel and vanadium alongside the existing business in UK energy storage, whilst the development interests in metallurgical coal and natural gas to be held as non-core for future realisation.

Board Changes - on 24 June 2019, the Company announced the appointments of Nigel Burton and Ewen Ainsworth as Non-Executive Chairman and Independent Non-Executive Director respectively, the appointment of Executive Director Scott Kaintz as Chief Executive Officer, and the resignation of Edmund Bugnosen as a Non-Executive Director. In September 2019, Andrew Bell left the Board.

More recently, and subject to shareholder approval of the fundraising, debt restructuring and share consolidation proposals announced on 5 December 2019, James Parsons will join the Board as Executive Chairman and Nigel Burton will transition from Non-Executive Chairman to Senior Independent Director.

Mambare Nickel-Cobalt Project - the Company's nickel-cobalt project at Mambare in Papua New Guinea (PNG), continued to make progress despite the lack of capital available to facilitate operations with the Company's joint venture partners during the period. Application for the renewal of the EL1390 exploration licences, encompassing the project were submitted to the PNG authorities in early March 2019, and the accompanying Warden's Hearing took place in April 2019. A successful renewal of these licences is pending and will cover the period June 2019 to June 2021. Also, during the year, the existing resource was updated to the current JORC 2012 code. The joint venture partners have proposed a work plan to focus on ground penetrating radar activities and studying opportunities to progress a direct shipping ore operation at the project.

Following the year end, the joint venture has been active, performing line-cutting activities in anticipation of a ground penetrating radar programme, which is expected to finish in early 2020. This work constitutes the first exploration activities at the site since 2012, and signifies a meaningful restart of the project. The focus at Mambare is to extend the results of the historical drilling that was conducted in 2010-12 onto the plateau area, which constitutes the primary target of the project, and where only 3% historic drilling has been conducted.

These activities are being conducted with a view to progressing the project towards a longer length mining license based on a direct shipping ore ("DSO") operation. This DSO operation would consist of excavation and export of raw ore, and so will involve no processing plant, no chemicals, no pipeline and no tailings. As a result, this plan would be uncontroversial compared to similar projects in the region.

Recent activities at Mambare have been led by our Oro Nickel Joint Venture partner, Battery Metals. The Company is scheduled to meet the partner in Sydney in early 2020 in order to discuss current and future JV operations, including funding and budgeting details.

Allied Energy Services - 2019 has been an active year at Allied Energy Services Ltd, in which the Company holds a 100% interest through its wholly owned subsidiary EsTeq Ltd. Allied Energy Services Ltd is principally focused on progressing the first project in the development pipeline, the Southport Energy Centre (the "SEC"), to financial close.

The SEC consists of two phases, with phase 1 being the installation of 9MW of gas-powered electricity generation accompanied by the installation of containerised batteries with 2MW of storage capacity. Commonly known as "Peaker Plans", the installation as envisioned offers the further ability to offer combined heat and power services directly to industrial and large retail clients in the area of the site. Phase 2 of the SEC would involve the removal of the existing waste management site and its replacement with a new waste reception and anaerobic digestion plant. Total capex for both phases is approximately £30m and it is currently expected that this funding will be done at the level of each individual special purpose vehicle ("SPV") associated with the project.

Beyond this initial SEC site, the Allied Energy Services Ltd project pipeline consists of an additional 3-4 sites, including a mix of peaker plants, bio-gas installations, and combined heat and power opportunities across the United Kingdom. The future for energy storage and grid services in the UK appears particularly robust. Allied continues to progress planning permissions for multiple sites in the UK with a view to providing grid management services as well as combined heat and power services.

Financing, Debt Restructuring and Reduction - in January 2019, the Company raised £676,000 through the issue of Convertible Loan Notes and at the same time extended the short term US$1.6m loan taken out in June 2018 until February 2020. In April 2019, the Company raised £240,000 (gross) at £0.0006 per share. At the same time, a number of modifications to the loan facility first announced on 6 June 2018 were agreed with YA II PN Ltd and Riverfort Capital Ltd (together the "Lenders"). Further changes, including a refinancing of these notes over a five-year period to July 2024, were announced after the year end on 22 July 2019.

A major focus of the Board, since the year end, has been to strengthen the balance sheet through raising fresh equity and both restructuring and reducing the debt including eliminating outstanding obligations to Red Rock Resources. As outlined below, subject to shareholder approval at the General Meeting on 23 December, this process will culminate in raising gross proceeds of £831,000 through the issue of equity at a price of £0.000275 per share, approximately £1m of Promissory Notes being retired, and a restructuring, which will reduce total obligations from approximately £1.9m to £0.729m and extend the term to 2021 with no conversion rights.

Discussion of Results

The Group incurred a loss of £2,607,978 in the period ended 30 June 2019. The majority of this loss comprised impairments of £1,503,377, principally comprising investments in Mining Equity Trust (2018: loss of £1,549,619). Finance costs over the year totalled to £376,743, reflecting increases in interest and finance fees (2018: £142,212). Overall, administrative costs were broadly flat for the year at £652,918 (2018: £640,664).

Prospects

On 5 December 2019, the Company announced a significant RNS that covered debt reduction and reprofiling, new capital being raised by the business, and the addition of James Parsons to the Board of Directors, pending standard due diligence checks. This release marks the culmination of the balance of a year's worth of work to take Regency beyond the corporate issues of the first quarter of the calendar year to much firmer foundations with significantly brighter prospects for all stakeholders.

At present, it is expected that James Parsons will join the Board following the general meeting currently scheduled for 23 December 2019. It is expected, he will apply his expertise in natural resources, fundraising and project development both to our existing portfolio of projects and any potential new projects to be introduced. James believes strongly that the future for battery metals exploration and development appears bright and that distributed energy production and storage strongly supplements this core focus. Given Regency's history in these areas, we believe Regency constitutes a good core around which to build.

With these changes in progress at the time of publication of these accounts, I feel confident stating that the prospects for Regency's onward development and ultimate success appear better than they have for many years. With the revised Regency strategy, Board team and financial support now coming into place, I look forward to progress being achieved during 2020.

Nigel Burton

Non-Executive Chairman

18 December 2019

Results and Dividends

The Group made a loss after taxation of £2,607,978 (2018: £1,549,619). The Directors do not recommend the payment of a dividend.  The following financial statements are extracted from the audited financial statements which were approved by the Board of Directors and authorised for issuance on 18 December 2019.

For further information, please contact:

Scott Kaintz 020 7747 9960 Director Regency Mines Plc

Roland Cornish/ Rosalind Hill Abrahams 020 7628 3396 NOMAD Beaumont Cornish Limited

Jason Robertson 020 7374 2212 Broker First Equity Limited

This announcement contains inside information under Article 7 of Regulation (EU) 596/2014.

Consolidated Statement of Financial Position

as at 30 June 2019

These Financial Statements were approved by the Board of Directors and authorised for issue on 18 December 2019 and are signed on its behalf by:

Nigel Burton

Non-Executive Chairman

The accompanying notes form an integral part of these Financial Statements.

Consolidated Income Statement

for the year ended 30 June 2019

Consolidated Statement of Comprehensive Income

for the year ended 30 June 2019

All of the Group's operations are considered to be continuing.

The accompanying notes form an integral part of these Financial Statements.

Consolidated Statement of Changes in Equity

for the year ended 30 June 2019

The movements in equity during the year were as follows:

See note 15 for a description of each reserve included above.

See note 15 for a description of each reserve included above.

Consolidated Statement of Cash Flows

for the year ended 30 June 2019

The accompanying notes and accounting policies form an integral part of these Financial Statements.

Company Statement of Financial Position

as at 30 June 2019

*Investment in associate was re-classified between the lines marked with asterisk in the comparative information to reflect indirect ownership of the MET associate. More details in note 1.6

These Financial Statements were approved by the Board of Directors and authorised for issue on 18 December 2019 and are signed on its behalf by:

Nigel Burton

Non-Executive Chairman

The accompanying notes form an integral part of these Financial Statements.

Company Statement of Changes in Equity

for the year ended 30 June 2019

The movements in reserves during the year were as follows:

See note 15 for a description of each reserve included above.

Company Statement of Cash Flows

for the year ended 30 June 2019

 *Investment in associate was re-classified between the lines marked with asterisk in the comparative information to reflect indirect ownership of the MET associate. More details in note 1.6

The accompanying notes and accounting policies form an integral part of these Financial Statements.

Notes to Financial Statements

1. Principal Accounting Policies

1.1 Authorisation of Financial Statements and Statement of Compliance with IFRS

The Group Financial Statements of Regency Mines Plc ("the Company" or "Regency"), for the year ended 30 June 2019, were authorised for issue by the Board on 18 December 2019 and signed on the Board's behalf by Scott Kaintz. Regency Mines Plc is a public limited company incorporated and domiciled in England and Wales. The Company's ordinary shares are traded on AIM.

1.2 Basis of Preparation

The Financial Statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations as endorsed by the EU ("IFRS") and the requirements of the Companies Act applicable to companies reporting under IFRS.

The principal accounting policies adopted are set out below.

Going Concern

The consolidated entity has incurred a loss before tax of £2,607,978 for the year ended 30 June 2019 (2018: loss of £1,549,619) and had a net cash outflow of £543,387 (2018: outflow of £86,350) from operating and investing activities. At that date there was a net current liability of £1,651,284 (2018: net current liability of £1,131,469). The loss resulted mainly from the impairment of the Group's investment in joint ventures £1,503,377 (2018: loss resulted mainly from impairment of the Group's investment in joint ventures totalling £1,943,132).

Regency announced on 24 July 2019 that it planned to refocus its business on its nickel-cobalt asset at Mambare, its vanadium project in the Yukon, Canada and on further developing its investment in Allied Energy Services Ltd. These changes were designed to reduce the cost burden of unnecessary projects and to refocus available capital where it was deemed most likely to create future value. The end result was a leaner and more focused entity with a lower long-term rate of expenditure and shorter-term expectations of cash generation.

Regency owns liquid assets that it can sell to fund operations, the most significant being its 8.55% stake in Curzon Energy Plc, listed on the Standard List of the London Stock Exchange (LSE:CZN) The value of this holding, following in Q4 2019, was approximately £53,000. The Company also has an 100% ownership interest in Allied Energy Services Ltd and owns 0.67% of Red Rock Resources Plc listed on AIM (AIM:RRR).

On 5 December 2019, the Company announced a corporate restructuring including Board changes, a proposed placing, a proposed share consolidation and debt reduction and restructuring. The end results of these actions, pending approval at a General Meeting scheduled for 23 December 2019, would be a reduction in total obligations outstanding from approximately £1.9m to £0.76m, new equity of £831,000 being raised, and the balance of the Company's debt being reprofiled into a new loan note with no payments due until December 2021 and carrying an 8% interest rate.

The successful results of these transactions will place the Company on much firmer financial footing with cash in the bank and a very manageable set of long-dated obligations on the balance sheet. The Company has historically demonstrated the ability to raise equity as required, as most recently demonstrated by a placing of £240,000 in April 2019.

The Directors believe that based on these developments and the forecasts and projections prepared, that sufficient liquid resources will be available for the Company to continue to operate as a going concern for the foreseeable future, and that the Company will be able to access adequate capital to operate successfully.

Company Statement of Comprehensive Income

As permitted by Section 408 Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income. The Company's loss for the financial year was £3,395,962 (2018: loss of £1,352,545). The Company's other comprehensive loss for the financial year was £3,828,511 (2018: loss £481,405).

Amendments to Published Standards Effective for the Year Ended 30 June 2019

New Standards, Amendments and Interpretations Effective for the Periods from 1 July 2018

The following new standards, amendments and interpretations are effective for the first time in these Financial Statements. However, none have a material effect on the Group and Company:

IFRS 9 "Financial Instruments" impact both the measurement and disclosures of Financial Instruments. The Group has not retrospectively re-stated prior period. The Group has analysed its investments into equity instruments on investment-by-investment basis and took a decision to designate two of its Available for sale investments held at the date of IFRS 9 adoption as fair value through profit and loss (FVTPL) and the rest as fair value through other comprehensive income financial assets (FVTOCI). Those of the Group's investments into equity instruments, that were held by the Group at 30 June 2018, and re-classified as FVTOCI on the date of the IFRS 9 adoption, are held by the Group with a long-term view and are not held for trading. For equity instruments designated at FVTOCI under IFRS 9, only dividend income will be recognised in profit or loss, all other gains and losses will be recognised in OCI without reclassification on derecognition. More details are provided in the note 12.

IFRS 15 "Revenue from Contracts with Customers" - the Company is pre-revenue hence the adoption of this standard had no impact on the reported results.

There were no new standards or interpretations effective for the first time for periods beginning on or after 1 July 2018 that had a significant effect on the Group's Financial Statements.

New Standards, Amendments and Interpretations Not Yet Adopted

At the date of authorisation of these Financial Statements, the following standards and interpretations, which have not been applied in these Financial Statements, were in issue but not yet effective for the year presented:

* Not yet endorsed for use in the EU at the time these accounts were authorised for issue.

The Directors do not expect that the adoption of these standards will have a material impact on the financial information of the Group in future periods.

Adoption of IFRS 16 will result in the Group recognising right of use of assets and lease liabilities for all contracts that are, or contain, a lease. For leases currently classified as operating leases, under current accounting requirements the Group does not recognise related assets or liabilities, and instead spreads the lease payments on a straight-line basis over the lease term, disclosing in its annual Financial Statements the total commitment. Due to the fact that the Group currently only has short term (less than 12 months) operating leases, IFRS 16 will not have a material impact on the results or balance sheet of the Group. All the exploration areas land lease agreements that the Company has for its areas of interest are outside of IFRS16 scope.

IFRS 17 establishes the principles for the recognition, measurement, presentation and disclosure of Insurance contracts within the scope of the Standard. The Group does not have any contract that fall within the scope of this standard and therefore it would have no impact on the reported results.

IFRIC 23 is to be applied to the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under IAS 12. This interpretation is unlikely to have a material effect of the reported results.

Standards Adopted Early by the Group

The Group has not adopted any standards or interpretations early in either the current or the preceding financial year.

1.3 Basis of Consolidation

The consolidated Financial Statements of the Group incorporate the Financial Statements of the Company and entities controlled by the Company, its subsidiaries, made up to 30 June each year.

Subsidiaries

Subsidiaries are entities over which the Group has the power to govern the financial and operating policies so as to obtain economic benefits from their activities. Subsidiaries are consolidated from the date on which control is obtained, the acquisition date, until the date that control ceases.

The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued, contingent consideration and liabilities incurred or assumed at the date of exchange. Costs directly attributable to the acquisition are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date.

Provisional fair values are adjusted against goodwill if additional information is obtained within one year of the acquisition date about facts or circumstances existing at the acquisition date. Other changes in provisional fair values are recognised through profit or loss.

Intra-group transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated on consolidation, except to the extent that intra-group losses indicate an impairment.

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated statement of comprehensive income. Any impairment recognised for goodwill is not reversed.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:

·; derecognises the assets (including goodwill) and liabilities of the subsidiary;

·; derecognises the carrying amount of any non-controlling interest;

·; derecognises the cumulative translation differences recorded in equity;

·; recognises the fair value of the consideration received;

·; recognises the fair value of any investment retained;

·; recognises any surplus or deficit in profit or loss; and

·; reclassifies the Parent's share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate.

Non-Controlling Interests

Profit or loss and each component of other comprehensive income are allocated between the Parent and non-controlling interests, even if this results in the non-controlling interest having a deficit balance.

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions. Any differences between the adjustment for the non-controlling interest and the fair value of consideration paid or received are recognised in equity.

1.4 Summary of Significant Accounting Policies

1.4.1 Investment in Associates

An associate is an entity over which the Company is in a position to exercise significant influence, but not control or jointly control, through participation in the financial and operating policy decisions of the investee.

Investments in associates are recognised in the consolidated Financial Statements using the equity method of accounting. The Group's share of post-acquisition profits or losses is recognised in profit or loss and its share of post-acquisition movements in other comprehensive income are recognised directly in other comprehensive income. The carrying value of the investment, including goodwill, is tested for impairment when there is objective evidence of impairment. Losses in excess of the Group's interest in those associates are not recognised unless the Group has incurred obligations or made payments on behalf of the associate.

Where a Group company transacts with an associate of the Group, unrealised gains are eliminated to the extent of the Group's interest in the relevant associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred in which case appropriate provision is made for impairment.

Where the Company's holding in an associate is diluted, the Company recognises a gain or loss on dilution in profit and loss. This is calculated as the difference between the Company's share of proceeds received for the dilutive share issue and the value of the Company's effective disposal.

In the Company accounts investments in associates are recognised and held at cost. The carrying value of the investment is tested for impairment when there is objective evidence of impairment. Impairment charges are included in the Consolidated Statement of Comprehensive Income.

1.4.2 Interests in Joint Ventures

A joint venture is a joint arrangement whereby the partners who have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of the joint arrangement, which exists only when decisions on relevant activities require the unanimous consent of the parties sharing control. The Group recognises its interest in the entity's assets and liabilities, using the equity method of accounting. Under the equity method, the interest in the joint venture is carried in the balance sheet at cost plus post-acquisition changes in the Group's share of its net assets, less distributions received and less any impairment in value of individual investments. The Group Income Statement reflects the share of the jointly controlled entity's results after tax.

Any goodwill arising on the acquisition of a jointly controlled entity is included in the carrying amount of the jointly controlled entity and is not amortised. To the extent that the net fair value of the entity's identifiable assets, liabilities and contingent liabilities is greater than the cost of the investment, a gain is recognised and added to the Group's share of the entity's profit or loss in the period in which the investment is acquired.

Financial Statements of the jointly controlled entity will be prepared for the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies used into line with those of the Group and to reflect impairment losses where appropriate. Adjustments are also made in the Group's Financial Statements to eliminate the Group's share of unrealised gains and losses on transactions between the Group and its jointly controlled entity. The Group ceases to use the equity method on the date from which it no longer has joint control over, or significant influence in, the joint venture.

At 30 June 2019, the Group had following contractual arrangements, which were classified as investments into associates and joint ventures:

·; Oro Nickel Ltd, a contractual arrangement with Battery Metals Pty Ltd, which represents a joint venture established through an interest in a jointly controlled entity, in order to develop and exploit the Mambare nickel project;

·; Mining Equity Trust (MET), LLC ("MET"), a Delaware-incorporated limited liability company, is a contractual arrangement with Legacy Hill Resources Ltd ("LHR") and Carraigbarre Capital Ltd ("CCL"), and the Company (as a minority shareholder) holds their interests in the MET associate. More details are disclosed in note 11.

1.4.3 Taxation

Corporation tax payable is provided on taxable profits at the current rate. The tax expense represents the sum of the current tax expense and deferred tax expense.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from accounting profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is measured using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition, other than in a business combination, of other assets and liabilities in a transaction which affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based upon tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is charged or credited in profit or loss, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity, or items charged or credited directly to other comprehensive income, in which case the deferred tax is also recognised in other comprehensive income.

Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax relates to income tax levied by the same tax authorities on either:

·; the same taxable entity; or

·; different taxable entities which intend to settle current tax assets and liabilities on a net basis or to realise and settle them simultaneously in each future period when the significant deferred tax assets and liabilities are expected to be realised or settled.

1.4.4 Property, Plant and Equipment

Property, plant and equipment acquired and identified as having a useful life that exceeds one year is capitalised at cost and is depreciated on a straight-line basis at annual rates that will reduce book values to estimated residual values over their anticipated useful lives as follows:

Office furniture, fixtures and fittings - 33% per annum

Leasehold improvements - 5% per annum

1.4.5 Foreign Currencies

Both the functional and presentational currency of Regency Mines Plc is Sterling (£). Each Group entity determines its own functional currency and items included in the Financial Statements of each entity are measured using that functional currency.

The functional currencies of the foreign subsidiaries and joint ventures are the Australian Dollar ("AUD"), the Papua New Guinea Kina ("PNG") and the US Dollar ("USD").

Transactions in currencies other than the functional currency of the relevant entity are initially recorded at the exchange rate prevailing on the dates of the transaction. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the exchange rate prevailing at the reporting date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Gains and losses arising on retranslation are included in profit or loss for the period, except for exchange differences on non-monetary assets and liabilities, which are recognised directly in other comprehensive income when the changes in fair value are recognised directly in other comprehensive income.

On consolidation, the assets and liabilities of the Group's overseas operations are translated into the Group's presentational currency at exchange rates prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the period unless exchange rates have fluctuated significantly during the year, in which case the exchange rate at the date of the transaction is used. All exchange differences arising, if any, are recognised as other comprehensive income and are transferred to the Group's foreign currency translation reserve.

1.4.6 Exploration Assets

Exploration assets comprise exploration and development costs incurred on prospects at an exploratory stage. These costs include the cost of acquisition, exploration, determination of recoverable reserves, economic feasibility studies and all technical and administrative overheads directly associated with those projects. These costs are carried forward in the Statement of Financial Position as non-current intangible assets less provision for identified impairments.

Recoupment of exploration and development costs is dependent upon successful development and commercial exploitation of each area of interest and will be amortised over the expected commercial life of each area once production commences. The Group and the Company currently have no exploration assets where production has commenced.

The Group adopts the "area of interest" method of accounting whereby all exploration and development costs, relating to an area of interest, are capitalised and carried forward until abandoned. In the event that an area of interest is abandoned, or if the Directors consider the expenditure to be of no value, accumulated exploration costs are written off in the financial year in which the decision is made. All expenditure incurred prior to approval of an application is expensed, with the exception of refundable rent, which is raised as a receivable.

Upon disposal, the difference between the fair value of consideration receivable for exploration assets and the relevant cost within non-current assets is recognised in the Income Statement.

1.4.7 Impairment of Non-Financial Assets

The carrying values of assets, other than those to which IAS 36 "Impairment of Assets" does not apply, are reviewed at the end of each reporting period for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets' fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow.

An impairment loss is recognised immediately in the consolidated statement of comprehensive income.

When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.4.8 Share-Based Payments

Share Options

The Group operates an equity-settled share-based payment arrangement whereby the fair value of services provided is determined indirectly by reference to the fair value of the instrument granted.

The fair value of options granted to Directors and others in respect of services provided is recognised as an expense in the income statement with a corresponding increase in equity reserves - the share-based payment reserve until the award has been settled and then make a transfer to share capital. On exercise or lapse of share options, the proportion of the share-based payment reserve relevant to those options is transferred to retained earnings. On exercise, equity is also increased by the amount of the proceeds received.

The fair value is measured at grant date and charged over the vesting period during which the option becomes unconditional.

The fair value of options is calculated using the Black-Scholes model taking into account the terms and conditions upon which the options were granted. The exercise price is fixed at the date of grant.

Non-market conditions are performance conditions that are not related to the market price of the entity's equity instruments. They are not considered when estimating the fair value of a share-based payment. Where the vesting period is linked to a non-market performance condition, the Group recognises the goods and services it has acquired during the vesting period based on the best available estimate of the number of equity instruments expected to vest. The estimate is reconsidered at each reporting date, based on factors such as a shortened vesting period, and the cumulative expense is 'trued up' for both the change in the number expected to vest and any change in the expected vesting period.

Market conditions are performance conditions that relate to the market price of the entity's equity instruments. These conditions are included in the estimate of the fair value of a share-based payment. They are not taken into account for the purpose of estimating the number of equity instruments that will vest. Where the vesting period is linked to a market performance condition, the Group estimates the expected vesting period. If the actual vesting period is shorter than estimated, the charge is be accelerated in the period that the entity delivers the cash or equity instruments to the counterparty. When the vesting period is longer, the expense is recognised over the originally estimated vesting period.

For other equity instruments, granted during the year (i.e. other than share options), fair value is measured on the basis of an observable market price.

Share Incentive Plan

Where the shares are granted to the employees under Share Incentive Plan, the fair value of services provided is determined indirectly by reference to the fair value of the free, partnership and matching shares granted on the grant date. Fair value of shares is measured on the basis of an observable market price, i.e. share price as at grant date and is recognised as an expense in the Income Statement on the date of the grant. For the partnership shares the charge is calculated as the excess of the mid-market price on the date of grant over the employee's contribution.

1.4.9 Pension

The Group operates a defined contribution pension plan, which requires contributions to be made to a separately administered fund. Contributions to the defined contribution scheme are charged to the profit and loss account as they become payable.

1.4.10 Finance Income/Expense

Finance income and expense is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts/re-payments through the expected life of the financial asset or liability to the net carrying amount of the financial asset or liability.

1.4.11 Financial Instruments

The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. Other than financial assets in a qualifying hedging relationship, the Group's accounting policy for each category is as follows:

Fair Value through Profit or Loss (FVTPL)

This category comprises in-the-money derivatives and out-of-money derivatives where the time value offsets the negative intrinsic value. They are carried in the statement of financial position at fair value with changes in fair value recognised in the Consolidated Statement of Comprehensive Income in the finance income or expense line. Other than derivative financial instruments, which are not designated as hedging instruments, the Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.

Amortised Cost

These assets comprise the types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment. Impairment provisions for current and non-current trade receivables are recognised based on the simplified approach within IFRS 9, using a provision matrix in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For the receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised in the consolidated statement of comprehensive income. On confirmation that the receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward-looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.

The Group's financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the consolidated statement of financial position. Cash and cash equivalents include cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and - for the purpose of the statement of cash flows - bank overdrafts. Bank overdrafts are shown within loans and borrowings in current liabilities on the consolidated statement of financial position.

Fair Value through Other Comprehensive Income (FVTOCI)

The Group has a number of strategic investments in listed and unlisted entities, which are not accounted for as subsidiaries, associates or jointly controlled entities. For those investments, the Group has made an irrevocable election to classify the investments at fair value through other comprehensive income rather than through profit or loss as the Group considers this measurement to be the most representative of the business model for these assets. They are carried at fair value with changes in fair value recognised in other comprehensive income and accumulated in the fair value through other comprehensive income reserve. Upon disposal any balance within fair value through other comprehensive income reserve is reclassified directly to retained earnings and is not reclassified to profit or loss.

Dividends are recognised in profit or loss, unless the dividend clearly represents a recovery of part of the cost of the investment, in which case the full or partial amount of the dividend is recorded against the associated investments carrying amount.

Purchases and sales of financial assets, measured at fair value through other comprehensive income, are recognised on settlement date with any change in fair value between trade date and settlement date being recognised in the fair value through other comprehensive income reserve.

Financial Liabilities

The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired:

Fair Value through Profit or Loss (FVTPL)

This category comprises out-of-the-money derivatives where the time value does not offset the negative intrinsic value or any liabilities held for trading. They are carried in the consolidated statement of financial position at fair value with changes in fair value recognised in the Consolidated Statement of Comprehensive Income. The Group did not hold any such liabilities at the date of IFRS 9 adoption or at the end of the reporting year.

Other Financial Liabilities

Other financial liabilities include

- Borrowings, which are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated statement of financial position. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

- Liability components of convertible loan notes are measured as described further below.

- Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

1.4.12 Investments in the Company Accounts

Investments in subsidiary companies are classified as non-current assets and included in the Statement of Financial Position of the Company at cost at the date of acquisition less any identified impairments.

For acquisitions of subsidiaries or associates achieved in stages, the Company re-measures its previously held equity interests in the acquiree at its acquisition-date fair value and recognises the resulting gain or loss, if any, in profit or loss. Any gains or losses, previously recognised in other comprehensive income, are transferred to profit and loss.

Investments in associates and joint ventures are classified as non-current assets and included in the statement of financial position of the Company at cost at the date of acquisition less any identified impairment.

1.4.13 Share Capital

Financial instruments issued by the Group are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. The Group's ordinary shares are classified as equity instruments.

1.4.14 Convertible Debt

The proceeds received on issue of the Group's convertible debt are allocated into their liability and equity components. The amount initially attributed to the debt component equals the discounted cash flows using a market rate of interest that would be payable on a similar debt instrument that does not include an option to convert. Subsequently, the debt component is accounted for as a financial liability measured at amortised cost until extinguished on conversion or maturity of the bond. The remainder of the proceeds is allocated to the conversion option and is recognised in the "Convertible debt option reserve" within shareholders' equity, net of income tax effects.

1.4.15 Warrants

Derivative contracts that only result in the delivery of a fixed amount of cash or other financial assets for a fixed number of an entity's own equity instruments are classified as equity instruments. Warrants relating to equity finance and issued together with ordinary shares placement are valued by residual method and treated as directly attributable transaction costs and recorded as a reduction of share premium account based on the fair value of the warrants. Warrants classified as equity instruments are not subsequently re-measured (i.e., subsequent changes in fair value are not recognised).

1.5 Significant Accounting Judgements, Estimates and Assumptions

The preparation of the Group's consolidated Financial Statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Significant Judgements in Applying the Accounting Policies

In the process of applying the Group's accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the consolidated Financial Statements:

Impairment of Investments in Associates and Joint Ventures

The carrying amount of investments in joint ventures is tested for impairment annually. In addition, assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amounts for those assets may not be recoverable. During the year, the investment into MET associate was fully impaired.

Following a failure to arrange the planned level of debt at the time of initial purchase, MET removed working capital from the Omega operating business to meet its ongoing purchase payments to the sellers of the Omega metallurgical coal operations during the months after initial close. This process put additional stress and pressure on the finances of Omega, and disrupted key activities such as forward bonding, maintenance and ultimately production of coal. As the planned debt was never ultimately secured and a funding gap remained, an investment by Carraigbarre Capital Ltd was agreed in July 2019, with a view to recapitalising the operating business. Following further delays in the funds associated with this investment arriving in the USA, the operating business was unable to continue production, and mining was finally terminated. The decision to fully impair the investment was made following discussions with the manager of MET, Legacy Hill Resources Ltd, in which it was deemed that little to no value is likely to be recovered from the assets in Virginia going forward.

Impairment of Loans to Subsidiaries in the Company Accounts

The loans made to Regency Resources Inc and Regency Mines Australasia Pty Ltd have been fully impaired as the view of the Directors that neither subsidiary is likely to be able to reasonably be expected to repay these borrowings going forward.

Significant Accounting Estimates and Assumptions

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

Share-Based Payment Transactions

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of share options is determined using the Black-Scholes model.

Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

·; In the principal market for the asset or liability; or

·; In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and, for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities, for which fair value is measured or disclosed in the financial statements, are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

·; Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

·; Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and

·; Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the Financial Statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

1.6 Re-Statement of Prior Period Error

In the year ended 30 June 2018, a loan of £1,503,377, granted to the Company's subsidiary Regency Resources Inc, was included in the line "Investments in associates and joint ventures" on the face of the Company's statement of financial position. To reflect the fact that the Company holds the interest in MET indirectly via Regency Resources Inc, the loan has been included into the line "Other receivables" within non-current section of the Company's statement of financial position in the comparative year. Relevant changes have also been made in the Company's statement of cashflows.

2. Segmental Analysis

As with all natural resource exploration and development ventures yet to generate cash from operations, ensuring adequate cash is available to meet operational obligations and to provide for investment opportunities is critical. This is therefore the main focus of management information presented to the chief operational decision makers, being the Executive Chairman and the Board of Directors.

The only sources of funds are issues of new equity and sales of exploration rights, investments or other assets. Therefore, in addition to monitoring the current market perception of the Company to shareholders, brokers and other possible providers of equity finance, constant attention is paid to:

- available cash;

- the market value of the Group's listed investments.

At 30 June 2019, the Group had cash and cash equivalents of £63,735 (2018: £126,125).

Once the Group's main focus of operations becomes production of natural resources, the nature of management information examined by the Board will alter to reflect the need to monitor revenues, margins, overheads and trade balances, as well as cash.

IFRS 8 requires the reporting of information about the revenues derived from the various areas of activity, the countries in which revenue is earned regardless of whether this information is used in by management in making operating decisions.

* Included in administrative expenses is depreciation charge of £195 (2018: £15,325) under Corporate and unallocated.

Information by Geographical Area

Presented below is certain information by the geographical area of the Group's activities. Investment sales revenue and exploration property sales revenue are allocated to the location of the asset sold.

3. Loss on Ordinary Activities Before Taxation

As declared in note 7, Directors are remunerated in part by third parties with whom the Company and Group have contractual arrangements.

4. Administrative Expenses

5. Finance Costs, Net

6. Taxation

Deferred tax amounting to £nil (2018: £nil) relating to the Group's investments was recognised in the statement of comprehensive income. No deferred tax charge has been made due to the availability of trading losses, which are estimated circa £3,389 thousand (2018: £3,204), and capital losses estimated circa £nil (2018: £nil).

7. Staff Costs

The aggregate employment costs of staff for the Group (including Directors) for the year was:

The average number of Group employees (including Directors) during the year was:

During the year, for all Directors and employees who have been employed for more than three months, the Company contributed to a defined contributions pension scheme as described under Directors' remuneration in the Directors' Report and a Share Incentive Plan ("SIP") as described under Management incentives in the Directors' Report.

8. Directors' Emoluments

The number of Directors who exercised share options in year was nil (2018: nil).

During the year, the Company contributed to a Share Incentive Plan, more fully described in the Directors' Report, where shares were issued to each employee, including Directors, making a total of 14,160,000 (2018: 4,539,788) partnership and matching shares. Those shares were issued in relation to services provided by those employees during the reporting year.

The Company also operates a contributory pension scheme more fully described in the section on remuneration details.

9. Loss per Share

The basic earnings / (loss) per share is derived by dividing the loss for the year attributable to ordinary shareholders of the Parent by the weighted average number of shares in issue. Diluted earnings / (loss) per share is derived by dividing the loss for the year attributable to ordinary shareholders of the Parent by the weighted average number of shares in issue plus the weighted average number of Ordinary shares that would be issued on conversion of all dilutive potential Ordinary shares into Ordinary shares.

10. Property, Plant and Equipment

11. Investments in Subsidiaries and Goodwill

The Parent Company of the Group holds more than 50% of the share capital of the following companies, the results of which are consolidated:

Goodwill

On 10 November 2017, RGM formed a 100% owned subsidiary, ESTEQ Ltd, to act as the vehicle for development of opportunities in the battery and energy storage technology sector across the UK. On 15 March 2018, ESTEQ Ltd committed to investing up to £250,000 into Allied Energy Services Ltd, representing an 80% interest in that entity. Non-controlling shareholders brought with them a development pipeline, including land rights and connections for combined battery and gas and anaerobic digestion generation plants to be constructed and operated across the UK. Further, the existing management team offers many years of experience in renewable energy, from procuring finance to finding key partners and constructing multiple anaerobic digestion plants across the United Kingdom.  

12. Investments in Associates and Joint Ventures

On 11 June 2017, the Company's subsidiary Regency Resources Inc. signed a shareholders agreement with Legacy Hill Resources Ltd, in accordance with which the company was issued 47% of Mining Equity Trust (MET), LLC ("MET") a Delaware-incorporated limited liability company in and through which Legacy Hill Resources Ltd ("LHR"), a privately-owned mining company, (as majority shareholder) and the Company (as minority shareholder) hold their interests in MET joint venture. This 47% stake represented Regency's proportionate share of cash contributions. The contribution of Regency to the JV was funded in part by a US$1,600,000 loan provided by Cuart Investments PCC Ltd and YA II PN, Ltd, the loan details are further described in the note 14.

On 9 July 2019, the Company announced that the shareholders of MET had agreed to accept a new investor, Carraigbarre Capital Ltd, who invested US$750,000 in exchange for a 45.02% stake in the business. Following delays in these funds arriving, mining activities ceased at the Omega operating assets, and considering subsequent conversations with the operator at Omega, Legacy Hill Resources, the Directors have decided to write off the investment in MET in full.

At 30 June 2019, the Parent Company of the Group had a significant influence by virtue other than a shareholding of over 20% or had joint control through a joint venture contractual arrangement in the following companies:

13. Financial Instruments with Fair Value through Other Comprehensive Income FVTOCI) and with Fair Value through Profit and Loss (FVTPL)

The Group has analysed its investments into equity instruments on investment-by-investment basis and took a decision to designate two of its available for sale investments held at the date of IFRS 9 adoption as fair value through profit and loss (FVTPL) and the rest as fair value through other comprehensive income financial assets (FVTOCI). Those of the Group's investments into equity instruments, that were held by the Group at 30 June 2018, and re-classified as FVTOCI on the date of the IFRS 9 adoption, are held by the Group with a long-term view and are not held for trading.