RGM.L Regulatory News (RGM)

24 Dec 2007 10:30

Regency Mines PLC24 December 2007 Regency Mines plc ("Regency" or the "Company") Final results announcement year ended 30 June 2007 Dated: 24 December 2007 Chairman's statement Dear Shareholders, Summary The Company reports the following developments during the year to 30 June 2007: • Increased emphasis on exploration of the Company's lateritic nickel property in Papua New Guinea • Share price increase from 1.62p to 6.875p • £715,260 before expenses raised from two share placings, in August 2006 at 1.875p and in April 2007 at 1.75p • Exploration early in the year at the Bundarra copper/gold project in Queensland Exploration The Company continued in the year ending 30 June 2007 to focus on nickel andcopper exploration. Early in the year a second exploration programme of the Bundarra project inQueensland was undertaken with Rotary Air Blast (RAB) drilling of 107 holes.Copper intersections up to 1.37% and gold up to 0.66 g/t were encountered butthe steeper topography in areas close to the granite/hornfels contact and thelimited penetration of the RAB drilling means that the company will have tofollow up with a more extensive programme, entailing track and drillsitepreparation and a deeper RC drill programme, before any significant results areobtained. A preliminary exploration programme on the 75% interest in a large lateriticnickel licence acquired just before the beginning of the year, covering theMambare plateau in Papua New Guinea, was undertaken and produced extremelypromising results. These results, together with the rising nickel price, and theperceived possibility of early cash flows from export of unprocessed limoniticore from the upper part of the deposit, meant that we decided to give priorityto further exploration of Mambare, rather than immediate follow-up of theBundarra results. An infrastructure study was carried out on Mambare and on the road and portfacilities in the area. The study gave initial confirmation of thepracticability of a trucking and shipping operation. Exploration work on site got under way slowly as the Company wanted initially tocarry out ground penetrating radar work on a portion of the licence, which wasdelayed by the contractor being held up on a previous job. Eventually, ratherthan waiting for the delayed contractor, the Company brought three drills onsite to start the drill programme. Despite some initial issues with maintenanceand supply, which were exacerbated by the election taking place in the country,drilling got under way. Red Rock Resources Plc The Company maintains its substantial interest in the AIM-quoted Red RockResources Plc ("Red Rock"). By the end of the year its shareholding in Red Rock,of 103,250,000 shares, had been diluted to below 50% (45.8%) as a result ofplacings of new shares by Red Rock. Post-balance sheet events A further issue of stock on 12 September 2007 at 3.5p per share strengthened theCompany's balance sheet by raising £585,000 before expenses. Exploration at Mambare continued, with over 40 drillholes completed by thehydraulic auger drill and wacker drill, and with samples being sent weekly/fortnightly to Jakarta for analysis. Even with a hydraulic unit fitted, theauger drill proved to have very limited penetration, failing even to penetratethe limonite layer completely and not reaching the saprolite layer. The wackerdrill has proved to provide better penetration.. In November an unexpected and unprecedented event occurred, which seems certainto delay any prospect of trucking ore for direct shipment from the project areato Oro Bay. Tropical cyclone Guba hit Oro Province (where the project islocated) hard and on 20 November the Papua New Guinea Government declared astate of emergency. Other areas were less severely affected, and the projectarea itself was, by comparison with lowland and coastal areas, less damaged,meaning that work was able to restart on site once the cyclone had passed.However the roads east, which lead to the provincial capital at Popondetta, andfrom there on to Oro Bay, were badly affected with most bridges being washedaway. Following discussions during the year with a number of Chinese mining groups,the Company announced on 22 November 2007 that it had entered into a 'Memorandumof Investment and Co-operation' with an Asia-based investment group which couldlead to a substantial investment in the Company and the Mambare project. The agreement is subject to contract and receipt of regulatory approvals. TheCompany envisages that these will be completed within three months. The Company also announced in November an investment in 9,375,000 new shares inAIM-quoted Alba Mineral Resources Plc ("Alba"), amounting to 10.65% of Alba'sissued share capital. One of the Company's shareholders, Starvest Plc, made anequal sized investment to that of the Company. The issue price was 1.6p,compared with a price in the market of 2.25p, and at the issue price Alba wasvalued at only £1m. Alba holds, among other interests, several sulphide nickellicences in Scotland and Sweden that are of particular interest. Alba hadrecently entered into a JV over the Scottish licences with Inco Europe Limited,a wholly owned subsidiary of the major nickel producer Inco Limited ("Inco").However, when Inco was taken over by the Brazilian mining company Companhia Valedo Rio Doce, the JV arrangement was cancelled. Future prospects Metals demand will continue to be strong as demand from rapidly developingeconomies, such as China and India, continues This provides a favourablebackdrop for all our activities, and our perception of the growing futureimportance of China as a commodity buyer and investor makes us ever moredetermined to create and develop long-term partnerships in China. We willcontinue to devote considerable time and effort to accomplishing this goal. The Company remains excited by the prospects at Mambare, and will continueexploration. A man-portable diamond rig is expected on site soon. Samples willbe sent for metallurgical testing in China shortly. In January the Company hascontracted for the much-delayed ground penetrating radar programme to begin, onprepared lines, in the south-west of the license area. Regency will review and report on progress in and prospects for repairing thetyphoon damage early in the New Year. We will work towards an early conclusion of the planned investment in theMambare project, which would allow an accelerated and intensive explorationprogramme to begin. Exploration is planned on the Company's nickel sulphide licences in WesternAustralia. Options for further work at Bundarra are being reviewed. Prices of iron ore and manganese have been strengthening and are expected toremain strong in 2008. Red Rock's prime exploration assets in these commoditiesin regions that are now the focus of strong investment interest make thisstrategic investment likely to continue to be the core component of Regency'sinvestment strategy. Regency will also attempt to crystallise value for its zinc assets held throughRange Mines Limited and will discuss with Alba Mineral Resources Plc, in whichit is now a substantial shareholder, ways in which the groups can co-operate tomaximise the value of Alba's assets and in particular its nickel portfolio. Andrew Bell Chairman 21 December 2007 The following are extracts from the financial statements for the year ended 30June 2007 which were approved by the Board of Directors on 21 December 2007audited by Chapman Davis LLP. Consolidated profit and loss accountfor the year ended 30 June 2007 Year ended Year ended 30 June 2007 30 June 2006 £ £ Turnover 57,786 234,384Cost of sales 29,511 44,200Gross profit 28,275 190,184Exploration costs (289,384) (89,815)Administrative expenses (451,864) (276,506)Currency (loss)/gain (204) 90Operating (loss) (713,177) (176,047)Interest receivable 2,034 6,625Interest payable (3,787) (31)Share of associates' loss for the year (27,335) -(Loss) on ordinary activities before taxation (742,265) (169,453)Taxation - (6,250)(Loss) on ordinary activities after taxation (742,265) (175,703)Minority interests 94,301 69,882Retained (loss) for the period attributable to (647,964) (105,821)Shareholders of the Company Loss per share - basic (0.45) pence (0.08) pence Statement of recognised gains and lossesFor the year ended 30 June 2007 Year ended Year ended 30 June 2007 30 June 2006 £ £ Deficit on revaluation of current asset (5,821) -investmentsUnrealised profit on deemed disposal of Red Rock 252,462 -Resources plc and subsidiaryProfit recognised directly to equity 246,641 -Loss for the financial period (647,964) (105,821)Total recognised losses for the year (401,323) (105,821) Consolidated balance sheetAs at 30 June 2007 30 June 2007 30 June 2006 £ £ Fixed assets Tangible assets 15,958 - Goodwill 45,000 45,000 60,958 45,000Current assets Debtors 191,421 105,422 Cash at bank 188,771 230,076 Current asset investments 420,753 48,540 Exploration properties 631,443 1,657,142 1,432,388 2,041,180Creditors - amounts due within (61,198) (80,941)one yearNet current assets 1,371,190 1,960,239Total assets less current 1,432,148 2,005,239liabilitiesShare capital and reserves Called-up share capital 170,226 129,897 Share premium account 1,726,815 1,079,947 Profit and loss account (851,675) (203,711) Share based payment reserve 112,992 - Revaluation reserve 246,641 - Consolidation reserve 689 550,156Equity shareholders' funds 1,405,688 1,556,289 Minority Interests 26,460 448,950 1,432,148 2,005,239 Company balance sheetAs at 30 June 2007 30 June 2007 30 June 2006 £ £Fixed assets Tangible fixed assets 14,196 - 14,196 -Current assets Debtors 376,443 189,023 Cash at bank 130,225 100,368 Current asset investments 545,253 380,049 Exploration properties 523,503 612,843 1,575,424 1,282,283Creditors - amounts due within one (36,818) (46,958)yearNet current assets 1,538,606 1,235,325Total assets less current liabilities 1,552,802 1,235,325 Share capital and reserves Called-up share capital 170,226 129,897 Share premium account 1,726,815 1,079,947 Profit and loss account (451,410) 25,481 Share based payment reserve 112,992 - Revaluation reserve (5,821) - Equity shareholders' funds 1,552,802 1,235,325 Consolidated cash flow statementfor the year ended 30 June 2007 Year ended Year ended 30 June 2007 30 June 2006 £ £ Net cash outflow from operating activities (498,166) (333,707)Returns on investment and servicing of finance (1,753) 6,594Corporation tax paid (6,029)Capital expenditure and investment (322,929) (195,012)Cash outflow before financing (828,877 (522,125)Financing 787,572 597,867(Decrease)/increase in cash in the year (41,305) 75,742 The financial information set out above does not constitute statutory accountsas defined in section 240 of the Companies Act 1985. The balance sheet at 30 June 2007, the profit and loss account, and the cashflow statement for the year then ended have been extracted from the Company'sstatutory financial statements upon which the auditor's opinion is unqualifiedand does not include any statement under Section 237 of the Companies Act 1985. Copies of the report and financial statements will be posted to Shareholdersbefore 31 December 2007 and will be available for a period of one monththereafter from the Company Secretary at 115 Eastbourne Mews, Paddington LondonW2 6LQ Alternatively, the report may be downloaded from the Company's website,www.regency-mines.com Enquiries: Andrew Bell 0207 402 4580 Regency Mines Plc Chairman John Simpson 020 7512 0191 Blomfield Corporate Finance Nominated Adviser Ltd Ron Marshman / John 020 7628 5518 City of London PR Limited Public RelationsGreenhalgh This information is provided by RNS The company news service from the London Stock Exchange