RGM.L Regulatory News (RGM)

Regency Mines Plc

("Regency Mines" or "the Company")

Final Results for the Year Ended 30 June 2013

Highlights

Financial strength improved through reduced borrowings and cost reduction

· Sale of 80% of interest in Fraser Range project to Ram Resources

· Royalty interest, 19.9% shareholding, and performance shares in Ram Resources retained

· Encouraging initial results from DNi pilot plant in Australia

· Multiple exploration trips to Sudan - several areas of significant potential identified

· Borrowings reduced from £1.6m to £0.53m

Commenting on the results, Andrew Bell, Chairman, said:

"This was a successful year operationally, with the sale of 80% of our Fraser Range project to Ram Resources and encouraging results from DNi's pilot plant in Western Australia, although shareholders have not yet seen the benefits of this progress.

"Regency Mines is now focused on two primary active projects: Papua New Guinea and Sudan. We also have strategic interests in Red Rock Resources and Alba Mineral Resources and are open to new exploration opportunities. We look forward to 2014 with confidence."

Executive Chairman's Review

Dear Shareholders,

Overview

When we embarked upon this financial year, one performance indicator by which we said we should be measured was an increase in the financial strength of the Company. In an unlikely year for this to be realised, we believe that this has in fact been achieved. By reducing the Company's borrowings from £1,591,749 to £527,471 and further since year end, we believe we have accomplished this objective. We have also sold to Ram Resources Limited ("Ram") 80% of our interest in the Fraser Range project in Australia so that the full financial burden of exploration in that environment, where discoveries have tended to be found quite deep underground, does not fall upon us. Our remaining 19.9% in Ram, and the royalty interest we have retained, are carried interests and therefore cost us nothing, while offering significant upside.

We have also responded to the weakness of markets by cutting our costs in various ways. One of these has been in the reduction of personnel costs, and sadly this has resulted in the departure of several members of staff, many of who have been significant contributors in years past. Our only substantial field operational costs during the year have been in several phases of exploration in Sudan, which at this early stage has been relatively inexpensive and cost-effective.

Elsewhere, our partners at Direct Nickel Limited ("DNi") have conducted a pilot plant process in Perth, Western Australia, on their nickel laterite processing technology. Although we are DNi's partners in the Mambare nickel project in Papua New Guinea, with a license to this exciting technology, and shareholders of theirs, the pilot plant testing process over the past year has cost us nothing while positioning DNi to move directly to the first commercial scale plant in 2014.

With the completion of the Ram deal, solid progress with the DNi test work, and several successful trips to Sudan, we could say with some confidence that this has been a good if not supremely active year operationally. However, it is perhaps understood that neither our shareholders nor our staff will feel exceptionally positive about a year that saw the Company affected by deteriorating sentiment as market conditions declined in the junior exploration sector.

It is a tribute to the motivation and discipline of our staff that even some of those who have moved on kept working on our projects right up until the end of their notice periods. The skills of our dedicated and professional geologists are critical to developing and adding value to our projects, and it is right to pay tribute to them on this occasion.

Western Australia

The conclusion of the Fraser Range transaction saw Ram re-launched as a company with its key tenements in the heart of the Fraser Range, one of the most active focal points of exploration activity in Australia at the moment. The Sirius Nova base metal discovery in the summer of 2012 is located 25km east of our tenements. The Tropicana gold discovery to the north east, made a few years ago, is along the same geological boundary trend. These discoveries have transformed this new and relatively unexplored geological environment into potentially the most exciting new frontier in Australia.

Ram is now beginning further exploration work in this area which is expected to be followed by drilling.

It is no accident that we are present in this area as we have for some time been concentrating on this geological boundary between the Yilgarn craton and the Albany-Fraser metamorphic terrane, along which we have other ground.

Although we have other tenements in Australia, held by Regency Mines Australasia Pty Ltd, some of which have potential, these are not considered to be core projects and exploration on them will only be carried out when we have available funds, and to the limited degree necessary to establish whether there is geological potential for a major discovery. This incubator unit is unlikely to be a substantial cost to our business, but by positioning ourselves in potentially interesting regions, we may hope to have further successes like that in the Fraser Range.

Sudan

Our farm-in to the joint-venture with IMRAS brought us into exploration in Sudan. The world's demand for phosphate and potash agrominerals will continue to grow as urbanisation increases and populations in the developing world mature and eating patterns change.

The increased recognition by mining companies of the future importance of fertilisers may be seen in BHP Billiton's abortive bid for Potash Corporation, and in their recent declaration that potash was to become the fifth pillar of their business. As that company's CEO recently put it succinctly to his shareholders, "A rising population and greater economic prosperity will change the patterns of food consumption, requiring higher yields from increasingly constrained arable land."

The three key macro-nutrients in fertilizer are nitrogen, phosphorous and potassium. Phosphate is a prime source of phosphorous, and potash a major source of potassium in a readily available form. Gypsum, which also contains calcium, can also be used as a fertilizer.

The one continent that, at the moment, has an excess of phosphate production over demand is Africa. The opportunity to explore for minerals present in neighbouring countries in what used to be - and is still nearly - Africa's biggest country, is one that came to us and we were happy to take. Working with the Sudanese government on agrominerals, and being one of the first companies into that country, gives us an insight and a head start in a country that has been mineral rich for millennia but neglected in the modern age.

In the last year, we have visited and identified a large gypsum occurrence on the coast, which also had potash potential and that we continue to explore.

We have eliminated through exploration areas nearly the size of England, and we have identified phosphate presence in a large new area which, as a result of our early exploration, we subsequently applied for.

The trip to this area - Jebel Abyad - is so recent that we still await results, but we have already identified a further nearby area of significant potential that warrants additional attention. On this latest trip, we conducted the first part of a programme of traverses across the Jebel Abyad basin and we expect to return, having received the results from initial test work, to complete the programme.

Our objective in Sudan is to bring in a major partner after establishing either significant occurrences or mineral resource estimates. This will be both to take on the financial burden of future exploration and to provide additional political support. The history of agromineral development in this part of the world shows that strategic concerns and resource nationalism, due to sensitivities around food security, have sometimes taken precedence over granted mineral rights. Through our partners, we would wish to be in a position to moderate the impact of any such pressures.

Papua New Guinea and Direct Nickel Ltd

We knew that the last year was going to be one where we remained in a holding pattern in Papua New Guinea where we had already delineated a large mineral resource estimate. The news flow this year would all come from our partner in the Mambare nickel project, DNi, in which we also have an investment. So it has proved to be. Twenty four hours a day, seven days a week processing began at the Perth pilot plant of DNi, which is situated at the Commonwealth Scientific and Research Organisation ("CSIRO") facility at Curtin University in Australia in January. The last campaigns in this test programme have just ended and results will soon follow. All the progress reports issued by DNi during the year have been positive, and we have every reason to expect the announcement of a successful outcome. This is important not just for DNi and the joint venture, but for the industry itself, as the DNi process has the potential to be a disruptive technology that will change the economics of the lateritic nickel industry.

When we first partnered with DNi, and then when we invested, various investment banks and broking houses that we went to see in London had been promoting and raising money for one or other rival company or technology and they often seemed dismissive of the DNi technology. We believe that it is now generally accepted that the DNi process has real potential and on conclusion of a successful pilot plant programme, may become the undisputed leading technology in the field. The next months will tell whether we got it right with this investment, but at least we have the reassurance of knowing already that we did not get it wrong in that competing technologies have failed to fulfil the expectations held of them.

We will continue to support, so far as we are able, our partners at DNi in the further development of their now public company, and in our jointly held project in Papua New Guinea.

Future

Having divested from direct involvement in our most valuable Australian asset, we are now down to two primary active projects. In one of these, Papua New Guinea, we do not expect any major exploration in the next months. We retain a strategic interest in our sister company, Red Rock Resources plc and in Alba Mineral Resources plc, and are open to new exploration opportunities. We believe that our success rate in exploration is one that should give shareholders real confidence as we look to the opportunities that 2014 will bring.

Yours sincerely,

Andrew BellChairman and CEO

29 November 2013

Results and dividends

Regency Mines and its subsidiaries (the ''Group'') made a loss before taxation from continuing operations of £5,166,017 (2012: £2,112,350) and a loss of £5,352,311 after taxation (2012: £2,026,549).

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 issue on 29 November 2013. 

For further information contact:

Andrew Bell 0207 747 9990 or 0776 647 4849 Chairman Regency Mines plc

Colin Aaronson / David Hignell 020 7383 5100 NOMAD Grant Thornton UK LLP

Nick Emerson 01483 413500 Broker SI Capital Ltd.

Guy Wheatley 02073828416 Joint Broker Beaufort Securities Ltd

Rupert Trefgarne 02031288817 Media Relations MHP Communications

Consolidated statement of financial position

as at 30 June 2013

Consolidated income statement

for the year ended 30 June 2013

Consolidated statement of comprehensive income

for the year ended 30 June 2013

Consolidated statement of changes in equity

for the year ended 30 June 2013

The movements in equity during the period were as follows:

Consolidated statement of cash flows

for the year ended 30 June 2013

1 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 financial statements have been prepared on the historical cost basis, except for the revaluation of certain financial instruments.

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 £2,054,435 (2012: £1,388,214). The Company's other comprehensive expense for the financial year was £94,159 (2012: £380,956).

Amendments to published standards effective for the year ended 30 June 2013

The following standards have been adopted during the year:

· IAS 12 "Income Taxes (Amendment) - Deferred Taxes: Recovery of Underlying Assets"; and

· IAS 1 "Amendment - Presentation of Items of Other Comprehensive Income".

Although the adoption of these amendments has had no impact on the financial position and performance of the Group, additional disclosures have been provided to comply with the revised standards.

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.

Adoption of standards and interpretations

As at the date of authorisation of these financial statements, there were standards and interpretations in issue but that are not yet effective and have not been applied in these financial statements, as listed below:

Standards, amendments and interpretations in issue but not effective

Effective for annual periods beginning on or after 1 January 2013:

· IFRS 13 "Fair Value Measurement";

· IAS 19 "Employee Benefits (revised)"; and

· IAS 28 "Investments in Associates and Joint Ventures".

Effective for annual periods beginning on or after 1 January 2014:

· IFRS 10 "Consolidated Financial Statements";

· IFRS 11 "Joint Arrangements"; and

· IFRS 12 "Disclosure of Interests in Other Entities".

Effective for annual periods beginning on or after 1 January 2015:

· IFRS 9 "Financial Instruments: Classification and Measurement".

The Directors do not anticipate that the adoption of these standards and interpretations in future periods could have a material effect on the financial position or performance of the Group and Company, other than the introduction of IFRS 10 which could affect the financial position and performance and IFRS 11, IFRS 12 and IAS 28 which are likely to change or increase the level of disclosure required in respect of the Group's investments. The Group intends to adopt these standards when they become effective.

IFRS 10 is a new standard which establishes principles for the presentation and preparation of consolidated financial statements. As a result of its publication, the Directors will be required to consider the application of the revised definition of control to determine whether additional entities will need to be consolidated and whether consolidation is still appropriate for those that currently are.

The new definition of control will require the Directors to consider whether the Company has:

a) power over the investee;

b) exposure, or rights, to variable returns from involvement with the investee; and

c) the ability to use power over the investee to affect the amount of the investor's returns.

The financial effect of such changes on the Group has not yet been reliably estimated. However, it is widely expected, irrespective of industry sector and without specific reference to the Group, that the adoption of IFRS 10 is likely to result in more entities being consolidated.

IFRS 11 replaces IAS 31 "Interests in Joint Ventures" and SIC-13 "Jointly-controlled Entities - Non-monetary Contributions by Venturers". It removes the option to account for jointly controlled entities ("JCEs") using proportionate consolidation. Instead, JCEs that meet the definition of a joint venture must be accounted for using the equity method. JCEs under current IAS 31 that will be classified as joint ventures under IFRS 11 will transition from proportionate consolidation to the equity method by aggregating the carrying values previously recorded, testing that amount for impairment and then using that amount as deemed cost for applying the equity method going forward. The Group recognises its interest in jointly controlled entity using the equity method of accounting. The application of this new standard will not impact the financial position of the Group.

IFRS 12 includes all of the disclosures that were previously in IAS 27 related to consolidated financial statements, as well as all of the disclosures that were previously included in IAS 31 and IAS 28. These disclosures related to an entity's interests in subsidiaries, joint arrangements, associates and structured entities. A number of new disclosures are also required. The adoption of IFRS 12 is likely to change or increase the level of disclosure required in respect of the Group's investments.

As a consequence of the new IFRS 11 and IFRS 12, IAS 28 has been renamed IAS 28 "Investments in Associates and Joint Ventures" and describes the application of the equity method to investments in joint ventures in addition to associates. The application of this new standard will not impact the financial position of the Group.

2 Loss per share

The basic 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 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.

The following reflects the loss and share data used in the basic and diluted loss per share computations:

The weighted average number of shares issued for the purposes of calculating diluted earnings per share reconciles to the number used to calculate basic earnings per share as follows:

In accordance with IAS 33, the diluted earnings per share denominator takes into account the difference between the average market price of ordinary shares in the year and the weighted average exercise price of the outstanding options. The Group has weighted average share options of 18,000,000 (2012: 22,763,661) which were not included in the calculation of diluted earnings per share because they are non-dilutive for the year presented.

3 The consolidated statement of financial position at 30 June 2013 and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended have been extracted from the Group's 2013 statutory financial statements. The auditors have reported on the 2013 financial statements; their report was unqualified and contained no statement under sections 498(2) or (3) of the Companies Act 2006. The financial statements for 2013 will be delivered to the Registrar of Companies by 31 December 2013.

4 A copy of the Company's annual report and financial statements for 2013 will be made available on the Company's website www.regency-mines.com shortly and at the Annual General Meeting on 30 December 2013; in addition the Annual Report will be posted to the Shareholders.