RGM.L Regulatory News (RGM)

Regency Mines PLC

('Regency', 'Regency Mines' or the 'Company')

Strategic Investment in Oracle Coalfields PLC

12 November 2010

Regency Mines (AIM: RGM), the mining exploration and mineral investment company with interests in nickel and other metals in Western Australia, Queensland, and Papua New Guinea announces that it has entered into an agreement with Oracle Coalfields PLC ("Oracle") to subscribe for shares in Oracle and expects thereafter to assist Oracle in the development of its business.

The Transaction

Oracle is a company incorporated in England and Wales with 165,711,000 ordinary shares of 0.1 pence par value ("Oracle Shares") in issue. Oracle (PLUS: ORCP) is traded on PLUS-Quoted, an unlisted securities Exchange Regulated Market operated in London by PLUS Markets plc, a recognised investment exchange and a Market Operator under the Markets in Financial Instruments Directive (MiFID).

Regency has agreed to subscribe for 18,500,000 new Oracle Shares ("New Oracle Shares") at a price of 5.5 pence for each New Oracle Share (the "Subscription"), with the £1,017,500 consideration payable in cash and expected settlement on 24 November 2010. Following the Subscription, Regency will hold approximately 10.04 per cent. of the enlarged issued share capital of Oracle.

It is the announced intention of Oracle to seek admission to trading on AIM in the first half of 2011. In consideration of the Subscription, Oracle has agreed that Regency will be given the right, but will have no obligation, to subscribe, at the time of admission to trading on AIM or another recognised market ("Listing"), for up to such number of Oracle Shares as, when aggregated with the New Oracle Shares, will constitute 20 per cent. of the issued share capital of Oracle following Listing (the "Subscription Right"). The Subscription Right will be exercisable at the price at which Oracle offers stock for subscription by third parties at Listing.

The Business and Assets of Oracle

Oracle Coalfields plc, through its 80 per cent. owned subsidiary Sindh Carbon Energy Limited, holds an exploration license over the 66.1 sq km Block VI of the Thar Coalfield in Sindh Province, Pakistan, some 380 km distant from Karachi, as well as other licenses. Block VI is situated 32km from the town of Islamkot with close proximity to roads and power networks. This license has recently been renewed for a year to 25 November 2011. Prior to the acquisition of the licence, extensive exploration had been commissioned by the Sindh Coal Authority, Government of Sindh, to delineate a resource. Further site work programme is currently underway by Oracle to complete a feasibility study with an objective of developing a coal mine. As disclosed in announcements by Oracle, UK coal consultants Dargo Associated Limited have defined a JORC Measured Resource of 1,423m tonnes of lignite coal in the license area, with an open-pittable Proven Reserve of 371m tonnes defined in part of the licence. Oracle has reported that the coal at Block VI has an average calorific value of 3,537 kcal/kg, a moisture content of 40% which can be reduced to 14% by drying, a sulphur level of 1.2% and an ash content of 7.5% which is low when compared to typical lignite coals and further that the coal quality is suitable for power plants and industry, particularly in the cement sector.

Memoranda of Understanding have been announced with Karachi Electric Supply Company for a joint venture mine mouth power station, and with Lucky Cement Limited for coal supply. Oracle has appointed SRK Consultants UK Limited to conduct a bankable feasibility study ("BFS") which is targeted for completion during 2011 and Wardell Armstrong International to conduct an Environmental and Social Impact Assessment. Following the completion of the BFS Oracle intends to seek conversion to a Mining License, and to start mine development and production in 2012, subject to timely completion of BFS and capital investment, at an initial level of 2.5m tpa to 3.5m tpa of coal.

Financial details

In the year to 31 December 2009, Oracle disclosed in its audited accounts a loss after tax of £235,230 and held cash and cash equivalents at that date of £5,859. Shareholders' Funds amounted to £527,937. In the six months to 30 June 2010, unaudited interim results disclosed a loss after tax of £79,549 with cash and cash equivalents of £977,913. Shareholders' Funds amounted to £1,387,206. During June 2010 Oracle raised £1,041,690 before expenses by the issue of 34,722,999 new Oracle Shares to investors at 3 pence per Oracle Share. This was the largest fundraising carried out on PLUS in 2010.

Reasons for the Transaction

Regency sees the opportunity to become a strategic investor in Oracle, with close cooperation in a potentially fast growing coal business with good management. Regency expects Oracle if it succeeds in its objective of admission to trading on AIM to achieve greater investor recognition and support, and considers the price at which the investment is being made to be advantageous. The investment is consistent with Regency's philosophy of seeking strategic long term involvements in projects where the scale of planned operations and the price of entry create the opportunity of large and compounding long term returns.

The investment will diversify Regency and take it into a major new area, where it believes it can add value for its new partners.

Further information about the business of Oracle may be found in the news announcement issued by Oracle today on the PLUS website, at:

http://www.plusmarketsgroup.com/overview.shtml?ISIN=GB00B23JN426/GBX/PLUS-exn

Other

Regency Mines plc has noted the rise in its share price during the week and notes the announcement made on 9 November by its 20.96% associated company Red Rock Resources plc (AIM:RRR) which reported on developments at RRR's Colombian gold mining operations, including an additional loan facility, and on completion of an acquisition and an increase in mineral resources at RRR's 5.23% ASX quoted investment Jupiter Mines Limited (ASX:JMS). The full text of the RRR announcement may be viewed at http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=10709670. RGM's investment in RRR represents approximately 85% RGM's current market capitalisation (assuming RRR/RGM share prices of 11.75p/3.925p).

Regency Mines continues to make progress in its exploration in Australia and in its Mambare joint venture, where further exploration is being planned, and an update will be released shortly.

Enquiries:

Updates on the Company's activities are regularly posted on its website, www.regency-mines.com.