Regency Mines PLC - Results of Strategic Review
("Regency" or the "Company")
Results of Strategic Review
o Interests in metallurgical coal and natural gas to be held as non-core for future realisation
o Directors believe the Company now positioned for onward development
The Company holds two major interests in the mining and battery metals space, that of its historic nickel-cobalt project in
The Mambare nickel project is the Company's largest historic project, and one which saw the majority of the Company's focus and expenditure prior to 2017. Regency currently holds a 50% interest in the project through a stake in Oro Nickel Vanuatu ("ONV"), which owns 100% of the operating entity,
The Mambare project sits on licence EL1390 and, as previously announced, contains a JORC Indicated and Inferred Mineral Resource Estimate of 162.5m tonnes at 0.94% Ni and 0.09% Co. With only 3% of the 80 square kilometre (km2) main plateau target tested by drill to date, the joint venture partners have long indicated the project's potential to be a large nickel laterite deposit with by-product credits in the form of cobalt.
Currently, the ONL JV awaits renewal of its exploration licences for Mambare, having recently renewed for the prior two-year period
Current plans sent to the MRA include a revised ground penetrating radar ("GPR") work programme, estimated to complete in the second half of 2019. To date, track and road clearing to support this effort has been largely completed with some bank cutting remaining. Spot gravelling and stump removal is scheduled for later this summer utilising heavier earth moving and bulldozer equipment. The two existing exploration camps have been put in good order and additional telecoms equipment is being installed.
GPR walking is now, subject to JV funding, scheduled to start by September, with proposals from Canadian service providers under consideration. The ONV JV's environmental permit has been released by the
Given the recent recovery in nickel prices, the JV partners will seek to convert the current exploration licence to a mining licence based on a direct shipping ore ("DSO") operation plan presently in development. Proposals call for a DSO operation exporting a minimum of 1.2m wet tonnes of laterite a year as an alternative to a much more complex local processing operation that might require over
This DSO operation would consist of a relatively simply flow sheet with no processing plant, pipeline or tailings. As a result, this plan would be both environmentally friendly and uncontroversial in comparison with similar efforts in the region. A definitive feasibility study is planned covering this DSO operation following the conclusion of this year's work programme.
An option to acquire a 50% interest in the Dempster vanadium project was first announced on
The project includes 196 claims covering 40.96 km2 with up to a 20km potential strike. The entirety of the property lies alongside the
The goal of the project is to further identify and exploit vanadium in black shales, a potentially ideal source of material for the battery metal markets. Previous work on the property was focused primarily on nickel, and it was from existing drill-holes that vanadium results were initially identified.
The Board believes that demand for vanadium is only likely to increase given its traditional use as an additive to steel and in the chemical industries, now being expanded due to its use in super alloys in the aeronautics and ceramics industries, and in particular the expected growth of its use in vanadium redox flow batteries. These batteries provide efficient storage and controlled release of energy in renewable power generation systems and are expected to be an increasing component of energy storage infrastructure solutions across the world.
The Company is currently engaged with the 50% partners in the project to develop both short and longer term plans for geological activities in the
The Company created its EsTeq (Energy Storage Technologies) subsidiary in 2017 in order to pursue opportunities in the battery storage, battery metals, and energy storage technology arenas, complementing the historic focus on mineral exploration activities. EsTeq invested in
AES spent most of 2018 refining its pipeline of energy storage projects, putting each through a series of gates to determine their suitability for further development. The nature of such a process is that many projects will appear promising for initial development, and in many cases planning permissions might be applied for as a first step, but ultimately will not meet all the criteria required for final investment. Projects once formally approved are to be developed via individual special purpose vehicles set up for each site or phase, with a reliance on the significant availability of debt funding in this sector.
The current focus of the business is on a single large development site near
Commonly known as "Peaker Plants", these types of plants are equipped to generate electricity and sell into the
Current plans call for the establishment of both gas and electricity grid connections, the latter being facilitated by the
A follow-on Phase II development of the existing site would involve the removal of the existing waste management site, which will not be disrupted during Phase 1, and its replacement with a new waste reception and anaerobic digestion plant. This potential second phase, which would be subject to technical and commercial due diligence and the availability of funding, constitutes a significantly larger and more complex overall development, but provides an additional pathway for growth within the existing site footprint. Beyond this initial
The Board believes that the growth of renewables in the
The Company retains two major investment holdings, an 8.55% stake in Curzon Energy Plc ("Curzon"), listed on the Standard List of the
Curzon Energy has announced that it is currently focused on the investment and development of a second natural gas project in
As announced on
Following the results of the strategic review the Board has decided that the Curzon and MET holdings will continue to be held as non-core assets, with the ultimate goal of achieving an exit and maximising value to investors as appropriate, but will no longer be an area of significant focus or resource expenditure going forward. As an equity holder in both investments, the Company has nominal residual obligations going forward.
The Board believes that metallurgical coal and natural gas, while potentially attractive in their own rights, do not constitute the best deployment of the Company's available resources.
This core will consist of a combination of our existing mining interests coupled with the investment in energy storage space, offering investors potential exposure to the battery story and energy revolution from the raw materials in the ground to their ultimate deployment in the modern
We believe the revised business is a compelling combination and proposition for
This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
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Quick facts: Regency Mines PLC
Market Cap: £1.91 m
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