10 Jan 2017 07:00
REGENCY MINES PLC
("Regency" or the "Company")
Metallurgical Coal Investment
10 January 2017
Regency Mines Plc ("Regency" or the "Company"), the natural resource development and investment company, announces the completion of its acquisition of a significant shareholding in Carbon Minerals Corporation ("CMC"), a Delaware Company which has acquired the Rosa metallurgical coal mine (the "Rosa Mine") located in Alabama, United States of America in the Warrior Coal Basin.
Key Highlights:
· Regency announced on 25 November 2016 a conditional binding Heads of Terms to acquire for £250,000 a 20% shareholding in CMC which owns the Rosa Mine;
· The conditions including due diligence and the signing of a Shareholders' Agreement have been fulfilled and the transaction has completed;
· The Rosa Mine received in 2010 a NI 43-101 report prepared by McGehee Engineering Corporation stating that Phase 1 of the Rosa Mine project contained Proven Reserves of 453,000 tons of coal at an average 14,070 BTU/lb with 5.14% average moisture content and 4.45% average ash content;
· 4,800 tons of coal has been delivered by third parties and contract washing of coal in the preparation plant has begun this week;
· Auger mining from the Rosa Mine is scheduled to begin in February 2017.
Andrew Bell, Chairman of Regency Mines, comments: "When we carried out our due diligence visit before Christmas our key finding was that several miles of benches, highwall and access had been prepared decades ago by previous operators so that for the foreseeable future no pre-strip is required to mine the targeted seam at Rosa. This will reduce initial cost and simplify operations, and so enhance the economics, reduce the risk, and improve the internal rate of return on our investment.
The quality of the metallurgical coal produced historically from this mine suggest that the coal will find a ready market, with identified interest from various parties including some who will put a value on its specific characteristics and have specialist uses for which it is suitable.
We have entered into a Shareholders' Agreement that provides in normal circumstances for a minimum 50% dividend payout ratio, with payments as far as possible to be made quarterly. We now look forward to working alongside Stephen Moscicki and his team at CMC to realise the great potential of this project. We have in him an experienced partner who owns several producing coal mines elsewhere in the United States."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
Glossary
Bench: a horizontal working elevation or ledge that forms a single level ofoperation above which mineral or waste materials are mined back to a bench face or highwall.
BTU: British Thermal Unit, the amount of work needed to raise the temperature of one pound of water by one degree Fahrenheit. In the U.S.A., the energy content of fuels is commonly expressed in BTUs. One BTU approximately equals 1055 joules.
Highwall: the unexcavated face of exposed overburden and coal in a surface mine.
Mineral Reserve: the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study, including adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.
NI 43-101 National Instrument 43-101, a Canadian set of rules and guidelines setting standards of disclosure for mineral projects, based on the Standards of Disclosure for Mineral Projects of the Canadian Institute of Mining.
Proven Mineral Reserve: the economically mineable part of a Measured Mineral Resource, with the highest degree of confidence in the estimate, restricted to that part of the deposit where production planning is taking place and for which any variation in the estimate would not significantly affect the potential economic viability of the deposit.
For further information, please contact:
Andrew Bell 0207 747 9960 Chairman Regency Mines Plc
Scott Kaintz 0207 747 9960 Executive Director Regency Mines Plc
Roland Cornish/Rosalind Hill Abrahams 0207 628 3396 NOMAD Beaumont Cornish Limited
Jason Robertson 0129 351 7744 Broker Dowgate Capital Stockbrokers Ltd.