RGM.L Regulatory News (RGM)

Regency Mines PLC

Update Report on Australian Exploration

14 March 2012

Regency Mines plc ("Regency"), the mining exploration and mineral investment company with interests in nickel and other minerals in Western Australia, Queensland, Papua New Guinea and Pakistan announces an update on the progress and programmes of its wholly owned subsidiary company Regency Mines Australasia Pty Ltd.

http://www.rns-pdf.londonstockexchange.com/rns/2818Z_-2012-3-13.pdf 

Summary

Regency Mines Australasia Pty Ltd ("RGMA") completed in 2011 a comprehensive Versatile Time Domain Electromagnetic (VTEM) survey and interpretation over 17 of its 20 tenements in Western Australia and Queensland. This was accomplished from December 2010 to September 2011 and in four separate phases. A total of approximately 2782 lines km were flown and results reviewed and prioritised by RGMA personnel. This interpretation process, for all areas except Bundarra, where it continues, has been completed and outline exploration proposals for 2012/2013 have been prepared.

With the current phase of exploration at its Papua New Guinea nickel/cobalt project having completed, Regency is reviewing these proposals and the next phase of work at RGMA's Pyramid Lake project has been approved so that work can be completed before the agricultural season.

The areas flown by VTEM covered tenements:-

http://www.rns-pdf.londonstockexchange.com/rns/2818Z_1-2012-3-13.pdf 

At present, a Mobile Metal Ion (MMI) sampling programme is being undertaken covering much of the Pyramid Lake Project area. This is to be followed immediately by an Air Core (AC)/Reverse Circulation (RC) drilling programme.

Further drill programmes at Kambalda and Bundarra are proposed for 2012/13, subject to budget approval.

RGMA has also applied for licenses covering two new projects in Western Australia, the Fraser Range Project (prospective for gold) and the Kimberly Downs/Ellendale North TM tenement (prospective for diamonds). Further details of these two projects are set out below.

http://www.rns-pdf.londonstockexchange.com/rns/2818Z_2-2012-3-13.pdf 

Figure 1. Project locations in Southern WA (and including the Fraser Range tenement new application).

Highlights

·; Pyramid Lake Sulphide Project (Sulphides and Gold)

VTEM survey results confirm the possible extension of conductive sulphide anomalies (initially identified in the 2010 drill programme) at depth. These will be further tested using a combined AC/RC drill programme during mid-March. A MMI sampling programme is currently being conducted to detect if any gold anomalies exist at depth.

·; Munglinup Graphite Project (Graphite and Magnesite)

Two near-surface conductors were identified by the VTEM survey in the Munglinup Graphite tenements. These tenements abut an area that has previously produced 1.3m tonnes at 18.2% graphite but it appears that no work was carried out on RGMA's area. The VTEM survey shows a possible continuation of the trend from this deposit so it is planned to carry out further ground analysis and geophysical investigation. The area also has potential for magnesite.

• Mt Gordon Project and West Lake Project (Nickel Sulphides and Gold)

Two primary conductors and a magnetic unit were identified from the VTEM survey at Mt Gordon and these are being plate modelled for further geophysical assessment. West Lake showed only drainage channels with no strong mineralisation so this tenement will be surrendered.

·; Kambalda Project (Nickel Sulphides and Gold)

The Kambalda region showed some moderate strength sulphide conductors toward the north of the tenement which may be drill tested using AC later in the year or early next year. Of more specific interest was the geophysical review of historic gold intersects that included 4m @ 4.57g/t gold from a depth of 59m, including 1m @2.37g/t followed by 1m at 14.6g/t which were not followed up. An RC drill programme has been designed, submitted and approved by the Department of Mines in Perth (DMP) that will test these anomalous gold results and will be carried out later this year or early next.

·; Bundarra (Copper and Gold)

Results from the VTEM survey measured a number of moderate conductive electromagnetic (EM) targets, of which four have been delineated for a diamond drilling programme and planned for July/August. Prior to these dates aeromagnetic (AEM) plate modelling of these targets will be generated.

·; Little Mt Isa/Halls Creek (Base Metals)

VTEM survey images showed several anomalous areas which were followed up with a field visit during October/November 2011. A small gossanous outcrop was identified suggesting sulphide mineralisation. Further geophysical ground-work is planned for later this year.

Proposed Work Schedule for Pyramid Lake

·; (Underway): A MMI gold sampling programme consisting of approximately 810 samples and following the Jerdacuttup Fault line

·; Later March: An AC drill programme over 74 holes to depths of approximately 100m

An RC drill programme over 13 holes to depths of approximately 150m

The VTEM AEM survey carried out over E74/318, E74/425 and E74/457 (Figure 2) focussed along strike from the sulphide intersection identified during the 2010 Drill Programme of E74/318 the results of which included:

• 28m at 2.35% titanium from 8m depth

• 24m at 10.60% sulphur from 24m depth to the end of the drill hole finishing in 8.87% sulphur

These results are more fully given in the Company's announcement of 23 June 2010.

A secondary conductor was confirmed at depth in E74/425 and, although smaller than the primary sulphide conductor target in E74/318, may represent an extension of the anomaly, and merits further testwork. A strong isolated conductor also features to the west (Figure 2). These targets are prioritised for an AC/RC drilling programme to be carried out mid-March (Figure 3). The AC programme is to test the basement interface through the broad AEM conductors whilst the RC drilling will test deeper through the basement rocks for non-depleted sulphide zones. The programme comprises approximately 4000m with the RC drilling going down to depths of 150m. To complement this work the Company is presently undertaking a MMI soil sampling programme for gold whereby approximately 810 samples will be taken from depths of 30cm. (Figure 4). This technique measures metal ions that travel upward from mineralised material to unconsolidated soils, which can aid in identifying and refining the location of deeply buried mineral deposits. First results from this programme are expected within two months.

Munglinup Graphite Project

The southern-most VTEM survey was flown over an area known previously for its graphite and magnesite production. E74/452 and E74/458 abut the Halbert's graphite resource area which has according to open file reports historically produced 1.3m tonnes at18.2% carbon graphite. The AEM data measured a near surface 1.3km long conductive zone coincident with the magnetic unit crossing both tenements. A provisional drill programme is being devised to be carried out at a later date.

Kambalda / Junction South

The Kambalda area is renowned as a gold and nickel province in Western Australia and the company holds five contiguous tenements. These were covered by phase 1 of the VTEM surveys where two moderate strength nickel conductors were identified in the northern part of the tenement. This area had been drilled by a previous operator but at widely spaced intervals. It is proposed to carry out an AC drill programme of approximately 2000m in late 2012/early 2013, subject to review of operational and budget priorities nearer the time, to more fully examine the contact margin which could be a conduit for mineralising fluids. Gold cannot be picked up by VTEM so historical drill records were researched accordingly. This investigation found significant drill intercepts of 4m at 4.57g/t gold from a depth of 59m which included 1m at 2.37g/t followed by 1m at 14.6g/t that were never investigated further. Consequently, an RC programme consisting of approximately 1500m in 8 drill holes has been planned that will cross a shear zone. These programmes have been submitted and approved by the DMP and the gold programme is scheduled for later this year (Figure 5).

http://www.rns-pdf.londonstockexchange.com/rns/2818Z_3-2012-3-13.pdf 

Figure 2. VTEM survey area showing conductors

http://www.rns-pdf.londonstockexchange.com/rns/2818Z_4-2012-3-13.pdf

Figure 3. Planned RC and AC drill holes for the March 2012 programme.

http://www.rns-pdf.londonstockexchange.com/rns/2818Z_5-2012-3-13.pdf 

Figure 4. MMI sampling grid.

http://www.rns-pdf.londonstockexchange.com/rns/2818Z_6-2012-3-13.pdf 

Figure 5. Proposed drill grids for Kambalda.

Bundarra

A VTEM survey was flown over five areas in the Bundarra region in late 2011 and interpretation of the results is ongoing. Moderate conductive targets have been delineated and four areas prioritised for a diamond drilling programme later in the year. This is an area historically known for small copper worked mines and AEM plate modelling will be performed prior to finalisation of the drill programme.

Little Mt Isa / Halls Creek

The VTEM survey over Little Mt Isa highlighted several strong anomalies but the area is underlain by graphitic schists and these could cause the anomalous areas. It was decided to carry out a field investigation to define this. Several gossanous float samples were identified at these areas and assayed, and may be transported material (Figure 6). However, as these graded 0.1% for both copper and zinc it is planned to carry out a detailed soil survey late this year or early next.

http://www.rns-pdf.londonstockexchange.com/rns/2818Z_7-2012-3-13.pdf 

Figure 6. Gossanous float sample.

NEW TENEMENTS

Fraser Range

Recently RGMA applied for three new tenements within the Fraser Range area of Western Australia. This area lies 300km south-west of the Tropicana Gold deposit and along the boundary between the Yilgarn Craton and the Albany-Fraser Metamorphic Terrane, much of which boundary is now within Anglo-Gold Ashanti tenements (Figure 7). As the ground is sand-covered, a review of historic geochemical data is currently in progress, and early indications of a weak gold anomaly along the regional magnetic contact are encouraging. Upon eventual grant and completion of the full review a Rotary Air Blast (RAB) drilling programme will be designed across the shear structures to test these geochemical signatures.

http://www.rns-pdf.londonstockexchange.com/rns/2818Z_8-2012-3-13.pdf 

Figure 7. Location of Regency tenements with relation to Anglo Gold Ashanti and Tropicana projects.

Kimberly Downs / Ellendale North TM

RGMA has applied for tenement ELA 04/2178 covering the northern section of the Ellendale Diamond field in Western Australia. The operating Ellendale diamond mine is located approximately 17km to the south east of the exploration tenement and is owned by "GEM Diamonds" (LSE: GEMD). Ellendale diamonds of 'Fancy Yellow' colour are much sought after throughout Asia and India. RGMA's 25 km² exploration tenement contains three mapped lamproite vents representing separate multi-phase volcanic intrusive events. The Ellendale 25, Ellendale 26 and Ellendale 43 lamproites' volcanic fissures are located in RGMA's tenement at the northern end of the large lamproite cluster group. These vents are magnetic, with Figure 8 showing the location and size of the lamproite fissures in a non-magnetic sandstone background.

A request to the Western Australia mines department to access relevant sections of the 1979-1980 closed file company reports has been made. If the historic bulk sampling and drilling results within the closed file reports show these pipes have not been thoroughly tested, larger diameter drilling will be considered into the Ellendale 25, Ellendale 26 and Ellendale 43 lamproites' pipes.

Historically microdiamonds have been found in the near surface of diamond bearing lamproite Ellendale 25, and this fissure is approximately 300m x 450m in size. Open file bulk sampling results from 1999 on Ellendale 25 were extracted from open file reports and show 91 small diamonds were collected.

http://www.rns-pdf.londonstockexchange.com/rns/2818Z_9-2012-3-13.pdf 

Figure 8: Aeromagnetic data (reduced to the pole 2VD) showing vents 25, 26 & 43

Table 1: Diamond results from open file report A77881

http://www.rns-pdf.londonstockexchange.com/rns/2818Z_10-2012-3-13.pdf 

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