3 May 2017 07:00
REGENCY MINES PLC
("Regency" or the "Company")
Project Update
Placing and TVR
2 May 2017
Regency Mines plc (AIM:RGM) the natural resource exploration, investment and development company provides an update on the current implementation of first commercial coal production and also announces it has raised £306,000 to enable further acceleration of the Company's expansion plans.
Highlights:
· Regency can confirm that preparatory steps for high quality metallurgical coal production and sale at its first project, the Rosa Coal Mine (in which the Company has a 20% interest), continue smoothly and the Company anticipates announcing commercial production in the very near term;
· The Company has also identified an accelerated pathway to commercial production at its second project, as referred to in the announcement of 20th April 2017, and stripping is now underway and additional plant is being brought to site, so that the project can be brought into production imminently through an initial simple strip mining operation;
· Acceleration of the second project is considered advantageous as it will lead to immediate significant revenue and margin generation, will clear faces for subsequent highwall mining, and will allow the crystallisation of substantial offtake agreements;
· To achieve the above and other purposes the Company has secured £306,000 of additional working capital through a placing with a small group of high net worth investors and the issue of 33,999,996 new ordinary shares of 0.01p each (the "Ordinary Shares") at a price of 0.90p per share (the "Placing Shares"), representing a 2.3% premium to the closing mid-market price of 0.88p on Friday 28th April (the "Placing");
· Each Placing Share is accompanied with a warrant ("May 2019 Warrants") to subscribe for a further new Ordinary Share at 1.8p with a two year exercise life from Admission, save that should the volume-weighted average share price of Regency exceed 10p for ten days Regency shall give warrant holders 7 days' notice that warrants must be exercised within a further 24 days and will otherwise expire.
Andrew Bell, the Regency Chairman, comments: "We are very excited with the opportunity presented by the expanding coal business within Regency. Following the extensive work undertaken in recent months Regency now has access to numerous coal projects and has been structuring the transactions surrounding each with a view to maximising the return available to equity, warrant and option holders in the Company. This work has very recently identified certain additional steps that can be taken to accelerate project two into earlier production. Given the substantial benefits this acceleration will provide we have chosen to take a small amount of additional financing to secure this acceleration.
The Company is currently at a vital inflection point. With two projects now coming into coal production revenue in the very near term, the validation of our strategies will, we believe, become increasingly clear to investors.
These are exciting times and the Company looks forward to providing further updates shortly."
Further Information and Additional Terms of Placing
The May 2019 Warrants are subject to call at seven days' notice should the closing price of the Shares exceed 10p for ten consecutive days.
The Placing is conditional on admission of the Shares to trading on AIM ("Admission").
Application has been made to the London Stock Exchange for Admission of the Placing Shares, which will rank pari passu with the Company's existing issued Ordinary Shares. Dealings are expected to commence at 8.00 a.m. on or around 8th May 2017.
Value Generation Limited ("VGL") of which Paul Johnson, a substantial shareholder in Regency, is a director and controlling shareholder, has subscribed for 2,777,777 Ordinary Shares under the Placing on the same terms as set out above for a sum of £25,000 which represents 0.5 per cent. of the Company's enlarged issued share capital. This transaction has been treated as a related party transaction under the AIM Rule 13 taking into account the transaction with VGL announced on 22 February 2017. As of 11 April 2017 Paul Johnson and Michelle Johnson held together 41,776,469 Ordinary Shares in the Company representing 7.96 per cent. of the Company's current issued share capital but have been interested in 10 per cent. or more of the then issued share capital within the last 12 months, and are therefore related parties under the AIM Rules. Following the subscription by VGL under the Placing, as from Admission, the related party will be interested in 40,189,246 Ordinary Shares representing 7.19 per cent. of the Company's enlarged issued share capital.
The Directors of the Company, who are all independent of VGL, consider, having consulted the Company's Nominated Adviser, that the terms of the subscription under the Placing are fair and reasonable insofar as the Company's shareholders are concerned.
Total Voting Rights
Following the Placing, the Company's total issued ordinary share capital will consist of 558,713,285 Ordinary Shares with voting rights. No Ordinary Shares are held in treasury.
As of the date of the Admission, the above figure of 558,713,285 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company under the FCA's Disclosure and Transparency Rules.
Background Information
Regency Mines is a natural resource development and investment company with interests in the production of metallurgical coal and in oil and mineral exploration. Regency holds energy interests in Horse Hill Development Limited, that has discovered substantial oil deposits near Gatwick, Curzon Energy plc, with development interests in coal bed methane in Oregon, and Carbon Minerals Corporation, which is currently re-opening the Rosa metallurgical coal mine in Alabama. Regency also controls the Mambare project in Papua New Guinea, where it established through exploration a large nickel-cobalt Resource, and the Motzfeldt tantalum-niobium Resource in southern Greenland.
Note: Market soundings, as defined in the Market Abuse Regulation ("MAR"), were taken in respect of the Placing with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.
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.