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Regency Mines PLC (RGM)

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Friday 27 March, 2020

Regency Mines PLC

Half-year Report

RNS Number : 7901H
Regency Mines PLC
27 March 2020
 

Regency Mines PLC

("Regency" or the "Company")

 

Half Year Report

 

 

27 March 2020

 

Regency Mines Plc ("Regency" or the "Company"), the battery metals and flexible grid solutions company announces its unaudited half-yearly results for the six months ended 31 December 2019.

 

Board Statement

 

Dear Shareholders,

 

The six-month period to 31 December 2019 saw the Company complete a major transformation, culminating in a sizeable fundraising, a new board of directors and chairman, significant debt reduction and restructuring as well as a revised strategic focus. 

 

Operationally, the six-month period saw activities largely focused on the Company's interests in the Flexible Grid Solutions investment (formerly known as Allied Energy Services).  In September 2019 the Company announced an exclusivity agreement with the landlord of the first project in the Company's portfolio, the Southport Energy Centre.  This was followed in mid-December by the buyout by Regency of the 20% interest in Flexible Grid Solutions that it did not already own.  This buyout gave Regency complete control of the energy development vehicle, aligned partner interests and prepared the Company to advance the first project at the Southport Energy Centre, located north of Liverpool. 

 

Later in December the Company announced an MOU with ion Ventures, in which ion agreed to work jointly with the Company on advancing and funding its energy project portfolio, while providing technical advice on the Southport Energy Centre.  This added a strategic partner to the business and helped ensure progress towards first anticipated first cash flows later in 2020.  With the UK government making flexible distributed green energy production and storage a priority, and the UK grid demanding both load and frequency balancing, Regency believes the opportunities in this sector are significant and that growth opportunities both organic and external remain attractive.   

 

In Papua New Guinea the Oro Nickel joint venture, of which Regency is a 50% stakeholder, conducted the first exploration activities at the Mambare nickel-cobalt project since 2012.  These activities consisted of 230km of line-cutting followed by a ground penetrating radar programme, designed to support 200km of surveys.  This program is designed to both increase understanding of the critical and previously underexplored plateau, while facilitating the application of a mining lease and associated permitting.  All of these efforts support development of a direct shipping ore operation on the site, which could be developed in a relatively short period of time and which offers low capex, no processing plant and associated chemicals, no pipeline or tailings. 

 

The work during 2019 was led largely by the Company's joint venture partner, Battery Metals Ltd, and the Company remains in discussions with Battery Metals regarding the best way to jointly take the project forward. 

 

In Canada, no work was conducted during the period at the Company's Dempster Vanadium project in the Yukon.  The Company is in discussions with the minority partners in the project about a potential 2020 exploration programme that would perform mapping and rock chip sampling to support a follow-on drill campaign as deemed appropriate. 

 

During the period the Company expended great efforts on restructuring its balance sheet, ultimately agreeing with various debtors to convert £1.1m of debt to equity, while creating a balance of new loan notes totalling £0.762m carrying an 8% interest rate with no payments due until December 2021.  This debt restructuring was accompanied by the raising of £0.830m of new equity capital.  These efforts leave the Company's balance sheet in the best shape it has been in for many years and give the Company a strong financial runway to progress its project portfolio.  Also, during the period losses fell from £1.75m to £0.620m period on period.  Most of these losses were administrative in nature and included costs associated with financing and the loan restructuring mentioned above.

 

Overall, the period was one of great positive change in the Company, leaving Regency with brighter prospects than it has had in many years as it entered 2020.  With a new team in place bringing access to capital and potentially new projects, the Company is well posited for success.   

 

At the time of writing this interim report the world is in the middle of handling the global Covid-19 outbreak, with a global recession looming and commodity prices plummeting.  It is inevitable that this outbreak will slightly delay or alter the timing of some of the commercial objectives Regency intended to pursue during 2020 but we will seek to minimise the impact. 

 

The Board and I want to thank our shareholders for their support during the 2019 transition period and to wish our shareholders, advisors, staff and their families safe passage through these turbulent times. 

 

We are committed to building Regency into a substantial value generating business.

 

 

James Parsons

Executive Chairman

 

 

Consolidated statement of financial position

as at 31 December 2019

 

Notes

31 December 2019

 

31 December 2018

 

30 June 2019

 

 

Unaudited, £'000

 

Unaudited, £'000

 

Audited, £'000

ASSETS

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

Investments in associates and joint ventures

6

1,947

 

1,860

 

1,950

Goodwill

 

42

 

42

 

42

Right of use asset

 

44

 

-

-

-

FVTOCI financial assets

7

77

 

195

 

178

Trade and other receivables

 

1,318

 

1,318

 

1,318

Total non-current assets

 

3,428

 

3,415

 

3,488

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

40

 

132

 

64

FVTPL financial assets

7

5

 

5

 

5

Trade and other receivables

 

836

 

155

 

115

Total current assets

 

881

 

292

 

184

 

 

 

 

 

 

 

TOTAL ASSETS

 

4,309

 

3,707

 

3,672

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

 

 

Equity attributable to owners of the parent

 

 

 

 

 

 

Called up share capital

8

2,716

 

1,927

 

1,999

Share premium account

 

22,320

 

20,404

 

21,113

Other reserves

 

(348)

 

(302)

 

(329)

Retained earnings

 

(21,570)

 

(20,125)

 

(20,960)

Total equity attributable to owners of the parent

 

3,118

 

1,904

 

1,823

 

 

 

 

 

 

 

Non-controlling interest

 

12

 

36

 

18

Total equity

 

3,130

 

1,940

 

1,841

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Lease liability

 

28

 

-

 

-

Total non-current liabilities

 

28

 

-

 

-

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Trade and other payables

 

373

 

423

 

309

Lease liability

 

17

 

-

 

-

Short term borrowings

 

761

 

1,344

 

1,522

Total current liabilities

 

1,151

 

1,767

 

1,831

 

 

 

 

 

 

 

TOTAL EQUITY AND LIABILITIES

 

4,309

 

3,707

 

3,672

 

 

 

 

 

 

 

 

The accompanying notes form an integral part of these financial statements.

 

 

Consolidated statement of income

for the period ended 31 December 2019

 

 

Notes

6 months to 31 December 2019

 

6 months to 31 December 2018

 

 

 

Unaudited, £'000

 

Unaudited, £'000

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

Management services

 

-

 

-

 

 

 

 

 

 

 

 

 

-

 

-

 

 

 

 

 

 

 

Administrative expenses

3

(371)

 

(267)

 

Impairment of loans and receivables

 

(8)

 

-

 

Gain on sale of FVTPL investments

 

-

 

38

 

Exploration expenses

 

(1)

 

(74)

 

Other operating income

 

-

 

11

 

Foreign currency gain

 

(15)

 

8

 

Finance costs, net

 

(222)

 

(164)

 

Share of gains in associates and joint ventures

 

(3)

 

(1,301)

 

Loss for the period before taxation

 

(620)

 

(1,749)

 

Tax expense

 

-

 

-

 

Loss for the period after taxation

 

(620)

 

(1,749)

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss)/profit for the period attributable to:

 

 

 

 

Equity holders of the parent

 

(614)

 

(1,746)

 

Non-controlling interest

 

(6)

 

(3)

 

 

 

(620

 

(1,749)

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

Loss per share - basic, pence

4

2.86

 

22.20

 

Loss per share - diluted, pence

4

2.86

 

22.20

 

           

 

 

 

 

Consolidated statement of comprehensive income

for the period ended 31 December 2018

 

 

 

6 months to 31 December 2019

 

6 months to 31 December 2018

 

 

Unaudited, £'000

 

Unaudited, £'000

 

 

 

 

 

 

 

 

 

 

(Loss)/profit for the period

 

(620)

 

(1,749)

Change in reserves due to IFRS 9 adoption

 

-

 

38

Change in FVTOCI reserve in relation to disposals

 

10

 

-

Revaluation of FVTOCI investments

 

(45)

 

(791)

Gain on sale of FVTOCI investments

 

4

 

-

Unrealised foreign currency gain/(loss) arising upon retranslation of foreign operations

 

15

 

10

Total comprehensive loss for the period

 

(636)

 

(2,492)

 

 

 

 

 

 

The accompanying notes form an integral part of these financial statements.

 

Consolidated statement of changes in equity

for the period ended 31 December 2019

 

The movements in equity during the period were as follows:

 

 

Share capital

Share premium account

Retained earnings

Other reserves

Total Equity attributable to owners of the Parent

Non-controlling interests

Total equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

As at 1 July 2018 (audited)

1,926

20,380

(18,378)

479

4,407

39

4,446

Changes in equity for 2018

 

 

 

 

 

 

 

Profit/ (loss) for the period

-

-

(1,747)

-

(1,747)

(3)

(1,750)

Other comprehensive (loss)/income for the period

-

-

 

(781)

(781)

-

(781)

Transactions with owners

 

 

 

 

 

 

 

Issue of shares

1

24

-

-

25

-

25

Share issue and fundraising costs

-

-

-

-

-

-

-

Total Transactions with owners

 

1

24

-

-

25

-

25

As at 31 December 2018 (unaudited)

1,927

20,404

(20,125)

(302)

1,904

36

1,940

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at 1 July 2019 (audited)

1,999

21,113

(20,960)

(329)

1,823

18

1,841

Changes in equity for six months ended 31 December 2019

 

 

 

 

 

 

 

Profit/ (loss) for the period

-

-

(614)

-

(614)

(6)

(620)

Other comprehensive (loss)/income for the period

-

-

4

(19)

(15)

-

(15)

Transactions with owners

 

 

 

 

 

 

 

Issue of shares

717

1,255

-

-

1,972

-

1,972

Share issue and fundraising costs

-

(48)

-

-

(48)

-

(48)

Total Transactions with owners

 

717

1,207

-

-

1,924

-

1,924

As at 31 December 2019 (unaudited)

2,716

22,320

(21,570)

(348)

3,118

12

3,130

 

 

 

 

 

 

 

 

 

FVTOCI investments reserve

Share-based payments reserve

Foreign currency translation reserve

Total other reserves

 

£'000

£'000

£'000

£'000

As at 1 July 2018 (audited)

(121)

76

524

479

Changes in equity for six months ended 31 December 2018

 

 

 

 

Other Comprehensive income

 

 

 

 

Revaluation of FVTOCI investments

(791)

-

-

(791)

Unrealised foreign currency gains arising upon retranslation of foreign operations

-

-

10

10

Total comprehensive income/(loss) for the period

(791)

-

10

(781)

As at 31 December 2018 (unaudited)

(912)

76

534

(302)

 

 

 

 

 

 

 

 

 

 

As at 1 July 2019 (audited)

(924)

76

519

(329)

Changes in equity for six months ended 31 December 2019

 

 

 

 

Other Comprehensive income

 

 

 

 

Revaluation of FVTOCI investments

(45)

-

-

(45)

Change in FVTOCI reserve in relation to disposals

10

-

-

10

Unrealised foreign currency gains arising upon retranslation of foreign operations

-

-

16

16

Total comprehensive income/(loss) for the period

(35)

-

16

19

As at 31 December 2019 (unaudited)

(959)

76

535

348

 

 

 

Consolidated statement of cash flows

for the period ended 31 December 2019

 

 

Note

6 months to 31 December 2019

 

6 months to 31 December 2018

 

 

Unaudited

£'000

 

Unaudited

£'000

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

(Loss)/profit before taxation

 

(620)

 

(1,749)

Decrease/(increase) in receivables

 

7

 

(68)

Increase in payables

 

189

 

128

Impairment of loans and receivables

 

8

 

-

Share of loss of associates and joint ventures, net of tax

 

3

 

1,301

Interest payable

 

222

 

164

Currency adjustments

 

15

 

(8)

Gain on sale FVTPL investments

 

-

 

(38)

Net cash flows from operations

 

(176)

 

(270)

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Proceeds from sale of FVTPL investments

 

99

 

146

Net cash flows from investing activities

 

99

 

146

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Proceeds from issue of shares

 

53

 

30

Interest paid

 

-

 

-

Loans received

 

-

 

100

Net cash flows from financing activities

 

53

 

130

 

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

(24)

 

6

 

 

 

 

 

Cash and cash equivalents at the beginning of period

 

64

 

126

Cash and cash equivalents at end of period

 

40

 

132

 

 

 

 

 

 

 

 

 

Half-yearly report notes

for the period ended 31 December 2019

 

1

Company and Group

 

 

As at 30 June 2019 and 31 December 2019 the Company had one or more operating subsidiaries and has therefore prepared full and interim consolidated financial statements respectively.

 

 

The Company will report again for the full year ending 30 June 2020.

 

The financial information contained in this half yearly report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the year ended 30 June 2019 has been extracted from the statutory accounts of the Group for that year. Statutory accounts for the year ended 30 June 2019, upon which the auditors gave an unqualified audit report which did not contain a statement under Section 498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of Companies.

 

2

Accounting Polices

 

 

Basis of preparation

 

The consolidated interim financial information has been prepared in accordance with IAS 34 'Interim Financial Reporting'.  The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30 June 2019, which have been prepared in accordance with IFRS.

 

 

During the period the following new standards were adopted. The adoption of these standards has not had a material impact on the financial information of the Group in future periods.

 

 

IFRS 16 is effective for periods beginning on or after 1 January 2019. The Group has elected to apply paragraph C5(b) and adopt IFRS 16 retrospectively with the cumulative effect of initially applying IFRS 16 recognised at the date of initial application (1 July 2019). Consequently, the comparative period has not been restated. On transition to IFRS 16, the Group elected to apply paragraph C8(b)(ii) and measure all leases previously classified as operating under IAS 17 at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to the leases recognised in the statement of financial position immediately before the date of initial application.

 

Under IFRS 16 lessees may elect not to recognise assets and liabilities for leases with a lease term of 12 months or less. The Company's offices premises are currently under a rolling monthly lease and are short-term leases, so the Company took IFRS 16 scope exemption and chose to recognise the lease payments in profit or loss on a straight-line basis over the lease term.

 

One of the operating lease agreements in the Company's subsidiary Allied Energy Services Ltd in relation to premises falls within the scope of IFRS 16 as it is a five-year lease. The application of the IFRS16 resulted in recognition on lease liability and related right-of use asset. There was no income statement result on the IFRS 16 first time application.

 

 

 

IFRIC 23 is effective for periods beginning on or after 1 January 2019. The Group elected to adopt IFRIC 23 retrospectively with the cumulative effect of initially applying the Interpretation recognised at the date of initial application (1 July 2019). Consequently, the comparative period has not been restated.

 

 

 

Half-yearly report notes

for the period ended 31 December 2019, continued

 

3

Administrative expenses

 

 

 

6 months to

 31 December 2019

 

6 months to

 31 December 2018

 

 

Unaudited

£'000

 

Unaudited

£'000

Staff Costs:

 

 

 

 

Payroll

 

150

 

92

Pension

 

5

 

6

Consultants

 

24

 

14

HMRC / PAYE

 

11

 

1

Professional Services:

 

 

 

 

Accounting

 

22

 

22

Legal

 

11

 

16

Marketing

 

40

 

19

Other

 

-

 

10

Regulatory Compliance

 

42

 

34

Travel

 

17

 

8

Office and Admin Costs:

 

 

 

 

General

 

2

 

7

IT related costs

 

3

 

5

Rent - Main Office

 

25

 

31

Other lease arrangements

 

16

 

-

Insurance

 

3

 

2

Total administrative expenses

 

371

 

267

 

 

 

 

Half-yearly report notes

for the period ended 31 December 2019, continued

 

4

Loss per share

 

 

 

 

The following reflects the loss and share data used in the basic and diluted profit/(loss) per share computations:

 

 

 

6 months to

 31 December 2019

 

6 months to

 31 December 2018

 

 

Unaudited

 

Unaudited

(Restated for share consolidation*)

 

 

 

 

 

 

Loss attributable to equity holders of the parent company, in Thousand Sterling (£'000)

614

 

1,747

 

 

 

 

 

 

Weighted average number of Ordinary shares of £0.0001 in issue, used for basic and diluted EPS

21,495,874

 

7,868,318

 

 

 

 

 

 

 

Loss per share - basic and diluted, pence*

2.86

 

22.20

 

 

 

 

 

 

*On 23 December 2019, the 1 for 100 Share Consolidation was completed and the post-consolidation share capital consists of 86,873,352 Ordinary Shares of £0.0001 each. More details are provided in note 8 below.

 

 

 

At 31 December 2019 and at 31 December 2018, the effect of all the instruments is anti-dilutive as it would lead to a further reduction of loss per share, therefore they were not included into the diluted loss per share calculation.

 

 

 

Options and warrants that could potentially dilute basic EPS in the future, but were not included in the calculation of diluted EPS because they are anti-dilutive for the periods presented:

 

 

 

6 months to

 31 December 2019

 

6 months to

 31 December 2018

 

 

Unaudited

 

Unaudited

 

 

 

 

 

 

Share options granted to employees - total, of them

16,180,567

 

27,060,000

 

Vested at the end of the reporting period

12,290,000

 

25,330,000

 

Not vested at the end of the reporting period

3,890,567

 

1,730,000

 

Warrants given to shareholders as a part of placing equity instruments - not all conditions met and/or out of the money

 

 

720,678,209

 

 

435,857,375

 

 

 

 

 

 

Total number of instruments in issue not included into the fully diluted EPS calculation

736,858,776

 

462,917,375

         

 

 

 

 

Half-yearly report notes

for the period ended 31 December 2019, continued

 

5

Segmental analysis

 

 

Since the last annual financial statements, the Group has re-considered its operational segments.

 

 

For the six-month period to 31 December 2019

Battery Metals (Nickel and Vanadium)

Flexible Grid Solutions (former Allied Energy Services Ltd)

Corporate and unallocated

 

 

Total

 

 

£'000

£'000

£'000

£'000

 

Revenue

-

-

-

-

 

 

 

 

 

 

 

Result

 

 

 

 

 

Segment results

(3)

(29)

(366)

(398)

 

Loss before tax and finance costs

 

 

 

 

 

Interest payable

 

 

 

(222)

 

Loss for the period before taxation

 

 

 

(620)

 

Taxation expense

 

 

 

-

 

Loss for the period after taxation

 

 

 

(620)

 

Total assets at 31 December 2019

3,264

107

938

4,309

 

 

 

 

 

 

 

 

 

 

 

 

 

For the six-month period to 31 December 2018

Battery Metals (Nickel and Vanadium)

Flexible Grid Solutions (former Allied Energy Services Ltd)

Corporate and unallocated

 

 

Total

 

 

£'000

£'000

£'000

£'000

 

Revenue

-

-

-

-

 

 

 

 

 

 

 

Result

 

 

 

 

 

Segment results

(32)

(13)

(1,540)

(1,585)

 

Loss before tax and finance costs

 

 

 

(1,585)

 

Interest payable

 

 

 

(164)

 

Loss for the period before taxation

 

 

 

(1,749)

 

Taxation expense

 

 

 

-

 

Loss for the period after taxation

 

 

 

(1,749)

 

Total assets at 31 December 2018

2,968

228

511

3,707

 

 

 

 

 

 

        

 

 

 

Half-yearly report notes

for the period ended 31 December 2019, continued

 

6

Investments in associates and joint ventures

 

 

 

31 December 2019

Unaudited

£'000

31 December

2018

Unaudited

£'000

30 June

2019

Audited

£'000

 

At the beginning of the period

2,760

3,161

3,161

 

Additions

-

-

293

 

Share of loss for the period using equity method

(3)

(1,301)

(1)

 

Impairment

-

-

(1,503)

 

At the end of the period

1,947

1,860

1,950

 

 

7

Financial assets

 

 

 

31 December 2018

Unaudited

£'000

31 December

2018

Unaudited

£'000

30 June

2019

Audited

£'000

 

FVTOCI financial instruments at the beginning of the period

177

-

-

 

Transferred from Available for sale category on IFRS 9 adoption

-

986

986

 

Additions

-

-

10

 

Disposals

(55)

-

(19)

 

Revaluations and impairment

(45)

(791)

(799)

 

FVTOCI financial assets at the end of the period (unaudited)

77

195

178

 

 

 

31 December 2019

Unaudited

£

31 December

2018

Unaudited

£

30 June

2019

Audited

£

 

FVTPL financial instruments at the beginning of the period

5

-

-

 

Transferred from Available for sale category on IFRS 9 adoption

-

113

113

 

Disposals

-

(108)

(108)

 

FVTPL financial assets at the end of the period (unaudited)

5

5

5

 

 

Half-yearly report notes

for the period ended 31 December 2019, continued

 

8

Share Capital of the company

 

 

The share capital of the Company is as follows:

 

 

 

Number of shares

 

Nominal, £'000

 

 

 

 

 

 

Allotted, issued and fully paid

 

 

 

 

Deferred shares of £0.0009 each

1,788,918,926

 

1,610

 

A deferred shares of £0.000095 each

2,497,434,980

 

237

 

Ordinary shares of £0.0001 each

1,516,894,159

 

152

 

As at 30 June 2019

 

 

1,999

 

 

 

 

 

 

Issued ordinary shares on 23 December 2018 at 0.0275 pence per share (cash placement)

56

 

-

 

Issued ordinary shares on 23 December 2018 at 0.0275 pence per share (cash placement)

3,021,818,173

 

302

 

Issued ordinary shares on 23 December 2018 at 0.0275 pence per share (loan re-payment)

530,030,036

 

53

 

Issued ordinary shares on 23 December 2018 at 0.0275 pence per share (loan re-payment)

2,596,363,636

 

260

 

Issued ordinary shares on 23 December 2018 at 0.0275 pence per share (loan re-payment)

1,022,229,140

 

102

 

Total number of ordinary shares of £0.0001 before 100:1 consolidation

8,687,335,200

 

717

 

 

 

 

 

 

Deferred shares of £0.0009 each

1,788,918,926

 

1,610

 

A deferred shares of £0.000095 each

2,497,434,980

 

237

 

B deferred shares of £0.000099 each

8,687,335,200

 

860

 

Ordinary shares of £0.0001 each after consolidation

86,873,352

 

9

 

 

 

 

 

 

At 31 December 2019

 

 

2,716

 

 

 

 

 

 

9

Capital Management

 

Management controls the capital of the Group in order to control risks, provide the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern.

The Group's debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.

There are no externally imposed capital requirements.

Management effectively manages the Group's capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.

There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.

 

 

 

 

Half-yearly report notes

for the period ended 31 December 2019, continued

 

10   Events after the reporting period

 

Completion of Allied Energy Services Buyout

On 3 January 2020 the Company announced the completion of the buy-out of the 20% minority shareholders in its UK energy storage business, Allied Energy Services Ltd.  As previously announced on 19 December 2019, Regency has issued 2,461,538 new ordinary shares to complete the buyout.  These shares are locked in for six months.

 

Mambare Project Update

 

On 22 January the Company announced the following update on its Mambare nickel-cobalt project in Papua New Guinea. 

 

Line Cutting and GPR Exploration Programme: 

Oro Nickel, a joint venture between Regency Mines plc and Battery Metals Pty Ltd, commenced line cutting operations at Mambare during 2019 and is delighted to report a total of 230km line cuttings are now complete.  A GPR programme has been initiated with 21 staff and 3 GPR units on site, supported by the Canadian company International Groundradar Consulting Inc. 

 

Oro Nickel expects the GPR field work will be largely completed on site by the end of Q2 2020.  Processing is to be handled in Canada, with the release of final data from these efforts likely later in 2020 after which the Company will issue an update on the results.  Additional work is also targeted during 2020, including planning for roads and local infrastructure as well as related aerial surveys. 

 

Licensing and Permitting:  

An application to renew the EL1390 exploration licences, encompassing the project, was submitted to the PNG authorities in March 2019 and is expected to be renewed during 2020 covering the period up to June 2021.

 

Oro Nickel is also currently progressing a plan to upgrade the existing exploration licence to a mining licence based on a DSO operation.  This DSO operation would consist of excavation and export of raw ore so will involve no processing plant, no chemicals, no pipeline and no tailings. 

 

The Company is delighted to report Oro Nickel is progressing both the Mining Lease application and the associated environmental permit application.

 

Oro Nickel Joint Venture Partner Update:

Recent activity at Mambare has been led by Oro Nickel Joint Venture partner, Battery Metals.  Following recent meetings, the Company and its partners are aligned on the forward activity plan for Mambare and also potentially for further battery metal acquisitions.  Discussions are underway between the partners regarding the budgeting and funding of the Mambare project.  These discussions include exploring various alternative JV structures, including a re-framed JV arrangement and potentially the pooling of both partner's interest in the project.  The Company expects to conclude these discussions during the course of Q1 2020 and will update shareholders as appropriate.

 

Launch of Flexible Grid Solutions Division

On 31 January 2020 the Company announced that it had elected to re-brand its UK energy business as Flexible Grid Solutions, to better reflect the breath of activity involved in supporting the transition from centralised large-scale fossil fuel intensive plants, to smaller distributed sites with flexibility to switch on and off as required. 

 

The Company further confirmed that the Board has approved to progress, with initial costs covered from its existing cash resources, the first project from its Flexible Grid Solutions project portfolio for progress to Financial Close around mid-year. Financial close represents the contractual formalisation of the equity and debt funding required, allowing site construction to begin.  It is expected that funding at Financial Close can largely be achieved with Project Finance and that maiden revenues will therefore follow around end of 2020.

 

Directors Dealings

On 31 January the Company announced the appointment of a new Company secretary and the issue of 481,662 ordinary shares, 3,040,567 options and 438,596 warrants further to commitments made prior to the recent restructuring as announced on 5 December 2019, but only executed now due to the Company being out of a close period.

 

The Company also announces the appointment, with immediate effect, of AMBA Secretaries Limited, as Company Secretary. 

Nigel Burton and Ewen Ainsworth joined Regency Mines as a Director on 24 June 2019 under an arrangement where 42.5% and 48.6% of their respective annual Directors' fee was to be paid in shares.  Accordingly, to clear historic balances the Company has issued 122,312 new ordinary shares to Mr. Burton and 190,929 new ordinary shares to Mr Ainsworth for the period from June 2019 to December 2019 (of the 190,929 shares awarded to Mr Ainsworth, 141,901 new ordinary shares have been issued to Discovery Energy Limited a  company controlled by Mr Ainsworth).  This deals with all outstanding legacy issues and the Non-Executive Directors of the Company are now being remunerated on normal market terms.

 

Consistent with the Company's strategy of preserving its cash balances, a further 168,421 shares and 438,596 warrants (at a price of £0.0285) have been awarded to consultants and advisors for services to be provided during 2020.

 

The Company has awarded Scott Kaintz, Chief Executive Officer, 3,040,567 three-year vest, five-year expiry options under the Company's Enterprise Management Scheme, to purchase new ordinary shares of the Company at a price of £0.0285. These options carry performance criteria under which vesting can be accelerated.  These options were unable to be awarded as part of the recent restructuring due to the Company being in a close period. 

 

Results of Annual General Meeting

 

On 31 January 2020, the Company announced that all resolutions put to shareholders at the Annual General Meeting were dully passed on a show of hands. 

 

Partial Release of Lock-In Agreement - Red Rock Lock-In Agreement

 

On 7 February 2020, the Company announced that it had agreed to partially release an existing lock-in agreement with YA PN II Ltd and Riverfort Global Capital in the Company's shares involving 7,789,091 shares, to facilitate a transaction by which these shares have been placed with new investors.  The balance of 18,174,545 shares held by YA PN II Ltd and Riverfort Global Capital will remain bound by the existing provisions of the lock-in agreement and are therefore not available to trade until June 2020.

 

Regency has executed a lock-in agreement with Red Rock Resources Plc ("RRR") covering the entire position (3,383,633 shares) currently held by RRR.  Under the terms of this agreement 100% of these shares will be locked in through March 2020, 70% will be locked up through June 2020 and 30% of the total will be locked in through December 2020, at which time the agreement will expire. 

 

Flexible Grid Solutions - Submission of Grid Application at Southport Energy Centre

 

On 3 March 2020, the Company announced the electricity grid application form (EREC G99) has been submitted at its first project in Southport, outside Liverpool.  The Company further confirmed that financial close on the project was targeted for mid-year and that maiden revenues were anticipated by year-end. 

 

For further information, please contact:  

Scott Kaintz 0207747 9960  Director Regency Mines Plc

Roland Cornish/ Rosalind Hill Abrahams 0207628 3396     NOMAD Beaumont Cornish Limited

Jason Robertson 020 7374 2212    Broker First Equity Limited

 

This announcement contains inside information under Article 7 of Regulation (EU) 596/2014.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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