Fraser West Project - Disposal of Interest

RNS Number : 6564P

Regency Mines PLC

26 October 2012

 



REGENCY MINES PLC

("Regency" or the "Company")

Fraser West Project - Disposal of Interest

26 October 2012

Regency Mines plc, a mining exploration and mineral investment company with interests in nickel and other minerals in Australia, Africa, and Papua New Guinea announces that it has agreed the sale of the majority of the rights to the Fraser West Project in Australia to RAM Resources Limited (ASX:RMR)("RAM"), a company listed on the Australian Stock Exchange.

The Fraser West Project, described more fully in the Company's announcement of 21^st September 2012, consists of three tenements with an area of 271 sq km in the Fraser Range area of Western Australia ("Tenements"). These three tenements were granted to Regency Mines Australasia Pty Ltd ("RGMA"), a wholly owned subsidiary of the Company, in the last three months and have a cost of less than AUD 20,000.

The principal terms of the transaction are as follows:

1.    In consideration of the acquisition of up to 80% of the Tenements ("Acquisition") RAM will issue in aggregate, 1,205,000,000 new RAM shares at a deemed issue price of $0.0015 (0.15 cents) in the following tranches;

a)    upon signing the Acquisition agreement, the immediate issue of 40,000,000 new RAM shares to the Company (such shares being within RAM's authorised capacity pursuant to ASX Listing Rule 7.1) ("Tranche A");

b)    subject to shareholder approval of the relevant resolution at RAM's AGM on 30th November 2012, the issue of 115,000,000 new RAM shares ("Tranche B") in consideration for a 10% interest in the Tenements; and

c)    subject to (i) receipt by RAM of an independent expert's report on the Tenements; (ii) receipt of any relevant shareholder and regulatory approvals by RAM; and (iii) a fundraising (via a RAM rights issue) of a minimum of AUD1,500,000 (net of costs) and on a best endeavours basis AUD2,000,000 (net of costs) at a price in excess of AUD0.0015 per share, the issue of 1,050,000,000 new RAM shares ("Tranche C") in consideration for an additional 70% interest in the Tenements.

2.    Subject to Tranche C being issued, RAM will have the right to acquire the remaining 20% interest in the Tenements by making a cash payment to RGMA of AUD440,000 on or before 30 November 2013.

3.    RAM has agreed to call a general meeting ("General Meeting") upon receipt of an independent expert's report on the Tenements to seek shareholder approval for the issue of Tranche C, and to recommend and use best endeavours to procure the support of major shareholders of RAM for the transaction.

4.    Upon the granting of the issue of Tranche B, Regency will be entitled to appoint one director to the board of RAM, and on the completion of the Acquisition will be entitled to appoint a further director to the board of RAM.

5.    From the date of the issue of Tranche B until the date of the General Meeting, RAM is to sole fund up to AUD250,000 for any work programmes on the Tenements as may be agreed between the parties for that period.

6.    In the event that RAM shareholders do not approve the issue of the Tranche C shares, the funding provided by RAM will not be recoverable. Thereafter, the Parties will contribute to the funding of the project pro-rata to their respective interests.

7.    From the date of the issue of Tranche C to 30 November 2013, the Seller's 20% interest in the Tenements is to be 'free-carried'.

8.    Regency will retain a 1% gross revenue royalty in the Tenements.

The price of RAM shares as at the close of business on 22^nd October 2012 was AUD 0.003 per share.

Regency Chairman Andrew Bell states: "This transaction enables us to realise value and at the same time fund the immediate exploration of these properties at a time when investors and explorers are focussing on the Fraser Range and Tropicana areas. The market that recognises the potential of this area is the Australian market, and the expertise we need to mobilise is in Australia."

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

 

END

 

 

MSCEAFEKALXAFFF