Regency Mines PLC (LON:RGM) Andrew Bell – Chairman
Andrew Bell speaks to Share Talk in relation to the continuing operations in its newly announced Metallurgical Coal Investment. We discuss the low-cost position and options in regards to the coal production and the washing plant. We update with share holders questions.
Shots of the Rosa met coal mine and wash plant
Metallurgical Coal Investment
Announced on the 10th January 2017 RNS Regency Mines Plc (“Regency” or the “Company”), the natural resource development and investment company, announces the completion of its acquisition of a significant shareholding in Carbon Minerals Corporation (“CMC”), a Delaware Company which has acquired the Rosa metallurgical coal mine (the “Rosa Mine”) located in Alabama, United States of America in the Warrior Coal Basin.
· Regency announced on 25 November 2016 a conditional binding Heads of Terms to acquire for £250,000 a 20% shareholding in CMC which owns the Rosa Mine;
· The conditions including due diligence and the signing of a Shareholders’ Agreement have been fulfilled and the transaction has completed;
· The Rosa Mine received in 2010 a NI 43-101 report prepared by McGehee Engineering Corporation stating that Phase 1 of the Rosa Mine project contained Proven Reserves of 453,000 tons of coal at an average 14,070 BTU/lb with 5.14% average moisture content and 4.45% average ash content;
· 4,800 tons of coal has been delivered by third parties and contract washing of coal in the preparation plant has begun this week;
· Auger mining from the Rosa Mine is scheduled to begin in February 2017.
Andrew Bell, Chairman of Regency Mines, comments: “When we carried out our due diligence visit before Christmas our key finding was that several miles of benches, highwall and access had been prepared decades ago by previous operators so that for the foreseeable future no pre-strip is required to mine the targeted seam at Rosa. This will reduce initial cost and simplify operations, and so enhance the economics, reduce the risk, and improve the internal rate of return on our investment.
The quality of the metallurgical coal produced historically from this mine suggest that the coal will find a ready market, with identified interest from various parties including some who will put a value on its specific characteristics and have specialist uses for which it is suitable.
We have entered into a Shareholders’ Agreement that provides in normal circumstances for a minimum 50% dividend payout ratio, with payments as far as possible to be made quarterly. We now look forward to working alongside Stephen Moscicki and his team at CMC to realise the great potential of this project. We have in him an experienced partner who owns several producing coal mines elsewhere in the United States.”
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