19 Nov 2010 16:22
Regency Mines PLC
('Regency', 'Regency Mines' or the 'Company')
Update on Mambare and Direct Nickel Pty Ltd;
Red Rock Resources Investment in Ascot Mining.
19 November 2010
Regency Mines, the mining exploration and mineral investment company with interests in nickel and other minerals in Western Australia, Queensland, Papua New Guinea, and Pakistan announces that it has reached agreement to invest in Direct Nickel Pty Ltd ("DNi"), and for joint financing with DNi of an exploration programme at the joint venture Mambare lateritic nickel/cobalt project in Papua New Guinea. It also reports on an investment by its 20.96% associated company Red Rock Resources plc (AIM:RRR).
Background
On 6 November 2009 the Company announced a joint venture with DNi, under which the parties agreed to co-operate on a 50/50 basis in the piloting and application of DNi's advanced nickel/cobalt leaching technology at Regency's Mambare lateritic nickel project in Oro Province, Papua New Guinea. Changing market conditions and nickel price developments coupled with new geophysics flown over the Mambare area for the Papua New Guinea government in Spring 2010 have resulted in a revised exploration and drill programme and a proposal for an initial £1.5m drill programme has now been prepared.
Subscription to DNi
Regency has agreed to subscribe for a new issue of shares by DNi on the same terms of investment as those of DNi's last funding round and value DNi on a pre-funding basis at US$75,000,000. Regency's investment will be for a total amount of $6,000,000 in two equal tranches of $3,000,000, the first for payment within seven days of 18 November 2010 and the second for payment one month after that date. The consideration will be settled by the issue of new shares in the Company, at a price equivalent to the volume weighted average share price of Regency in the five trading days up to and the five trading days after 18 November 2010.
Exploration Joint Venture
Regency and DNi have agreed that they will each contribute £1,000,000 to the next phase of exploration at Mambare, which will start immediately. It is provided inter alia that an Operating Committee will be set up to conduct this programme which will consist of two representatives from each of DNi and Regency. The Exploration Manager, who will be nominated by DNi and approved by the Company, will be a member of the Operating Committee. The committed budget will be drawn down in tranches from DNi and Regency by the Operating Committee as work proceeds.
Other Matters
The existing agreements and understandings between the parties in relation to the joint venture are not superseded but continue to guide the parties in their conduct, and over the next weeks the parties will consider, revise, and adapt the detailed documentation laying out the next stages.
A further and fuller announcement is expected to be made next week.
Red Rock Resources Investment in Ascot Mining.
The Company's 20.96% associated company Red Rock Resources plc ("Red Rock" or "RRR"), a gold mining and exploration company with projects in Kenya and Colombia, and interests in steel feed, uranium, and rare earths today reported a £1.5 million investment in Ascot Mining plc ("Ascot") by way of 10% convertible loan notes 2015, convertible at any time at Red Rock's discretion into new Ascot ordinary shares at 20 pence per share. In addition Red Rock has been granted warrants to subscribe for 10,500,000 additional new Ascot ordinary shares at an exercise price of 20 pence per new Ascot ordinary share, valid for 5 years. Ascot is quoted on the PLUS-quoted market, an exchange regulated market operated in London by PLUS Markets plc, where it trades under the stock code ASMP, and is traded on XETRA and PLUS. The full text of the announcement may be viewed at: http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=10718769.
For further information contact:
Regency Mines PLC Andrew Bell, Chairman 0207 402 4580
Sandra Spencer, Public and
Investor Relations 0207 402 4580
Nominated Adviser
Religare Capital Markets Peter Trevelyan-Clark/Ben Jeynes 020 7444 0800
Broker
Simple Investments Ltd Nick Emerson 01483 413500
Updates on the Company's activities are regularly posted on its website www.regency-mines.com.