REGENCY MINES PLC (“Regency” or the “Company”) Grant of Option over Motzfeldt – Issue of Equity and TVR
Share Talk publish a chart from ZaK Mir our In-house Technical Analysis on #RGM and an exclusive interview covering today’s RNS update with Andrew Bell
REGENCY MINES PLC
While it can be said that for small caps as an asset class the start of 2017 has been as transformational as the beginning of 2016 for miners, this does not mean that one can rely on any minnow being a multi bagger without merit. At this stage we are probably more in the scenario of those stocks who do move, moving much further and faster than they would have like for like a few months ago. In the case of Regency Mines the big USP on the daily chart is the way that for the first time in months both the 50 day and 200 day moving averages are rising in parallel.
This is in many ways even better than a Golden Cross buy signal in the sense it suggests sustained positive momentum. On this basis one would expect to see a sustained break of post September resistance at 0.6p on a weekly close basis this week / next week, with the potential upside over the following 3-4 months as high as the top of a rising 2015 price channel at 1.4p. This may sound ambitious but once the log jam breaks at 0.6p the bulls should be back in charge. Only back below the 200 day line at 0.44p currently would even begin to delay the upside scenario.
The views expressed are the author’s own and all readers should do their own research and seek appropriate financial and regulated stockbroker advice.
Share Talk exclusive interview covering today’s RNS update
Share Talk spoke to Andrew Bell, Chairman of Regency Mines. We speak about the Grant of Option over Motzfelt to VGL. We cover the new business direction and how this option fits in with the strategy of Regency Mines. We highlight the possible short term aim of providing revenues into the business and the next news items to watch out for.
Grant of Option over Motzfeldt, Issue of Equity
Regency Mines plc announces that it has granted a four month option to Value Generation Limited,a private company (the “Option” and the “Optionor”/”VGL”) to acquire the Company’s 100% interest in license 2014/01 covering the Motzfeldt intrusive complex in southern Greenland (“Motzfeldt”).As a condition of the Option, VGL has also subscribed £75,000 for new shares in Regency (“Subscription”).
As consideration for the Option, VGL has agreed to purchase 11,538,461 new ordinary shares of 0.01 pence each (“Shares”) in the Company at a price of 0.65p per share for a gross consideration of £75,000, with 1 for 1 warrants exercisable at a price of 1.3p for eighteen months (“August 2018 Warrants” and “Subscription”).
The purpose of the Subscription is to provide working capital for the development of the Company’s coal interests and other working capital purposes.
The Subscription is conditional on admission of the Shares to trading on AIM (“Admission”). Application has been made to the London Stock Exchange for Admission of the Shares, which will rank pari passu with the Company’s existing issued Ordinary Shares. Dealings are expected to commence at 8.00 a.m. on or around 28 February 2017.
The Optionor will utilise the Option period to carry out due diligence on Motzfeldt. The Optionor has the right at any time within the four month Option period to exercise the Option and acquire 100% of Motzfeldt for an exercise consideration of £350,000 payable in cash. In the event the Option is exercised Regency will also be granted a 1.25% Gross Revenue Royalty over any future production from the Motzfeldt license. In the event the Option is exercised and Motzfeldt is sold on within the next eighteen months, then if the sale consideration exceeds £5m Regency will be paid an additional consideration of £500,000 and if the sale consideration exceeds £10,000,000 Regency will be paid an additional consideration of £1,000,000.
Information on VGL
VGL reported unaudited shareholders’ funds its unaudited abbreviated balance sheet as at 31 March 2016 of £29,925. Its director and controlling shareholder is Paul Johnson. It was announced on 25 November 2016 that Paul Johnson and Michelle Johnson held 10.06 per cent. of the Company’s issued share capital and on 11 January 2017 that their holding had reduced to 8.9 per cent. Accordingly, Paul Johnson and VGL are Related Parties under the Aim Rules and the therefore the Subscription and the Option (“Transaction”) fall within the requirements of Aim Rule 13.
The Directors of the Company, none of whom are involved in the Transaction, consider, having consulted the Company’s Nominated Adviser, that the terms of the Transaction are fair and reasonable insofar as the Company’s shareholders are concerned.
Information on Motzfeldt
The Motzfeldt license contains a JORC-compliant Inferred Mineral Resource estimate of 340mt at 120ppm Tantalum Pentoxide, 1850ppm Niobium Pentoxide and 4600ppm Zirconium Dioxide. As at the last audit date of 30th June 2016, it was carried in the Company’s accounts at a book value of £35,574.
Andrew Bell, Regency Chairman, states: “We welcome this approach by a party interested in progressing exploration at our Motzfeldt license. This license, promising as it is, was not considered core to the Company’s activities, which are principally focussed on the drive to build up our metallurgical coal interests in the U.S. We have therefore been open to suitable opportunities for partnership. This transaction, if completed, will relieve us of funding obligations while leaving us through the retained royalty the ability to benefit from any future production. The Optionor in taking a placing of shares at a premium to the market price has shown its serious intent, and we look forward to working with them.
Progress at the Rosa coal mine continues on track and further announcements will be made in due course.”
Total Voting Rights
Following the Placing, the Company’s total issued ordinary share capital will consist of 439,923,032 Shares with voting rights. No Shares are held in treasury.
The above figure of 439,923,032 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company under the FCA’s Disclosure and Transparency Rules.
Regency Mines is a natural resource development and investment company with interests in oil and mineral exploration, and in the production of metallurgical coal. Regency holds energy interests in Horse Hill Development Limited, that has discovered substantial oil deposits near Gatwick, Curzon Energy plc, with development interests in coal bed methane in Oregon, Carbon Minerals Corporation, which is currently re-opening the Rosa metallurgical coal mine in Alabama, and other coal interests. Regency also controls the Mambare project in Papua New Guinea, where it established through exploration a large nickel-cobalt Resource, and the Motzfeldt tantalum-niobium Resource in southern Greenland.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information, please 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 Robertson 0129 351 7744 Broker Dowgate Capital Stockbrokers Ltd.
All information is provided on an as-is basis. Where we allow Bloggers to publish articles on our platform please note these are not our opinions or views and we have no affiliation with the companies mentioned