24 Nov 2017 07:00
Regency Mines Plc
("Regency" or "the Company")
Update on Metallurgical Coal Investment
24 November 2017
Further to the announcements of 25 November 2016, and 10 January 2017, Regency Mines Plc, the natural resource exploration and development company with interests in hydrocarbons and base metals, announces an update on its involvement in the Rosa metallurgical coal mine and wash plant (the "Rosa Mine") located in Alabama, United States of America in the Warrior Coal Basin.
In consideration of a refundable advance of £34,800 by Regency, US Carbon Resolutions Corporation has given Regency an option to buy the 80% of Carbon Minerals Corporation ("CMC"), the owner of the Rosa Mine, not already owned by Regency.
Regency will now have a period of sixty days in which to carry out a comprehensive due diligence on CMC and the Rosa Mine. Should Regency be satisfied with all aspects of this due diligence, and subject to other conditions, Regency would be able to acquire the Rosa Mine, including the wash plant and all other property rights, rights of action, leases, licenses, permits, shareholdings and other rights including the entire ownership of MCoal Corporation, the direct holder of the Rosa Mine, for the sum of £250,000.
Regency notes that the satisfaction of the conditions, including due diligence, is uncertain and that the eventual terms of a transaction acceptable to Regency may not be those set out today. At this moment, the Company has no audited financial information on CMC but understands that there has been minimal turnover from the coal operations and that the Rosa Mine is carried in the books at US$1.65 million with a comparable amount of long-term debt owed to Carbon Trading Specialist LLC. As part of the due diligence exercise, the Company will be ascertaining the financial position of CMC and will announce the relevant figures if and when the further investment proceeds.
Andrew Bell, Chairman, comments: "Progress at Rosa to date has been unsatisfactory and our hopes for early cashflow from our initial investment have not been met. This additional purchase would allow our partners to continue their focus on other assets and by allowing us to take operational control could enable us to advance the Rosa Mine and take advantage of high prices for specialist and metallurgical coal. It would be expensive to replicate the wash plant facilities, and our inquiries to date indicate that there is no other comparable facility nearby, so that we expect there to be a market for washing coal, besides the known potential for mining a high value metallurgical coal product.
The acquisition is subject to due diligence but at this price may have potential for the Company and play a part in our North American coal involvement. Further coal announcements will be made in due course."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information 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 Robertson020 7374 2212 Broker First Equity Limited