Agromineral Option Amendment

RNS Number : 1682K

Regency Mines PLC

16 August 2012

 



REGENCY MINES PLC

AGROMINERAL OPTION AMENDMENT

16 August 2012

Regency Mines plc ("Regency" or "the Company"), 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 extended the option entered into with International Mineral Resources (Agrominerals Sudan) Ltd ("IMRAS") to conduct due diligence covering agromineral and mineral licenses in Sudan ("Option") and previously announced on 4 July 2012.   

Amended term of the Option

An initial trip was undertaken by a due diligence team and its preliminary report made several recommendations in relation to expansions of the license areas under due diligence to in excess of 80,000 sq km and clarification of the terms on which licenses may progress from the exploration to the mining stage.

The Option Letter Agreement ("OLA") signed on 2 July 2012, has been amended by the parties to extend the due diligence period for exercise of the Option to 30 November 2012. Regency will now make the agreed payment of $35,000 following completion of the initial due diligence visit to Sudan to have the right to enter into the Transaction (as defined below).

The Company will send a geological team to work on the ground on the Licenses during the extended due diligence period to carry out additional testwork with a field-portable X-ray fluorescence (XRF) machine and conduct mapping.

Amended Terms of the proposed Transaction (as defined below)

Upon the completion of successful due diligence and a decision by the Regency board to proceed with the exercise of the Option to enter into the Transaction (as defined below),  Regency will pay $100,000 in cash or stock at the price prevailing on the day of exercise to IMRAS.

Upon signature of agreements reasonably satisfactory to Regency between IMRAS and the Government of Sudan stating the terms on which the licenses would be able to progress to mining licenses, Regency will pay a further $250,000 in cash or stock at the price prevailing on the day of exercise to IMRAS.

 Upon grant of license rights over certain additional identified areas agreed between Regency and IMRAS, Regency will pay a further $150,000 in cash or stock at the price prevailing on the day of exercise to IMRAS.

Upon the making of these three payments , Regency will receive 26% of the enlarged share capital of IMRAS

Upon the proving up by Regency of a JORC or similar Resource on two of the Licenses, Regency would be entitled to pay a further $2,500,000 and increase its interest in IMRAS to 51% (together with the above paragraphs, the "Transaction").

Andrew Bell, Chairman of Regency, states: "The extraordinary potential of Sudan, the receptive investment environment, and the quality of the portfolio have been confirmed by the initial results of our due diligence. Further work after the end of Ramadan will enable us to get the fuller picture we need and visit further areas".  

THERE CAN BE NO GUARANTEE THAT THE COMPANY WILL ENTER INTO THE TRANSACTION.

Enquiries:

Andrew Bell	020 7402 4580 or    07766 474849	Regency Mines plc	Chairman
Sandra Spencer	020 7402 4580 or 07757 660 798	Regency Mines plc	Public and Investor Relations
Gerry Beaney/ Daniela Amihood	020 7383 5100	Grant Thornton Corporate Finance	Nominated Adviser
Nick Emerson	01483 413500	Simple Investments Ltd	Broker

 

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