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RNS Number : 4153Q

Regency Mines PLC

06 June 2018

Regency Mines Plc

("Regency" or "the Company")

Update on Joint Venture with Legacy Hill Resources

Incorporation of Mining Equity Trust, LLC

Company Signs US$1,600,000 Loan Agreement

6 June 2018

Further to the announcements of 6 December 2017 and 27 February 2018, Regency Mines Plc, the natural resource exploration and development company with interests in hydrocarbons and base metals, announces that that it has now, in accordance with the co-operation agreement announced on 6 December 2017 and the joint venture agreement ("JVA") announced on 27 February 2018, has deposited US$2,000,000 in escrow pending completion of the joint venture funding. This is its agreed share of joint venture funding under the JVA, and Regency will hold 47% of Mining Equity Trust (MET), LLC ("MET") the new Delaware-incorporated limited liability company in and through which Legacy Hill Resources Ltd ("LHR"), a privately owned mining company, (as majority shareholder) and Regency (as minority shareholder) will hold their interests in the previously announced metallurgical coal joint venture. This 47% stake represents Regency's proportionate share of cash contributions after the 30% management share held by LHR.

The purpose of the Joint Venture ("JV"), as previously announced, is the structuring and financing of acquisitions in the U.S. metallurgical coal sector, and their subsequent management and operation.

The assets of MET at inception are the cash contributions of the JV partners.

The contribution of Regency to the JV has been funded in part by a US$1,600,000 loan provided by Cuart Investments PCC Ltd and YA II PN, Ltd and arranged by Riverfort Global Capital Limited (the "Note").

Background of Legacy Hill Resources

Legacy Hill Resources is a mining company founded by D. Saradhi Rajan. It has a multi-disciplinary team focussed on technical and operating expertise and uses a low risk, cashflow focussed approach to build assets with strong growth prospects.

Details of the Note

Regency has agreed to borrow gross proceeds of $1,600,000 (net $1,520,000) from institutional investors in order to fund a portion of its obligations under the JV. The loan will carry a 10% interest rate and be for an initial term of six months, and is subject to an implementation fee of $96,000. A further six-month extension available for a 5% fee. If extended, the loan may be converted by the noteholder at a fixed price equal to 130% of the 10 day VWAP prior to the initial repayment date/date of the available six month extension period (the "Fixed Price").

If the loan is extended past six months a payment schedule will be applicable and the payments may be paid in either cash or shares at the discretion of the Company. If paid in shares, the payment amount will be convertible at the lower of (i) the Fixed Price, or (ii) a price equal to 90 per cent of the lowest daily VWAP over the five trading days immediately preceding the date of the relevant payment date. The Company has the right to prepay the loan at any time in full for a 3% redemption fee, provided that after the First Repayment Date the Company may only prepay the loan if the stock price is trading below the Fixed Price at the time of prepayment.

The lender will further receive three performance bonuses:

$50,000 payable if the Company's VWAP exceeds GBP0.008 for ten consecutive days

$50,000 payable if the Company's VWAP exceeds GBP0.01 for ten consecutive days

$50,000 payable if the Company's VWAP exceeds GBP0.0125 for ten consecutive days.

These bonuses will be payable at any time in the next two years that their payment conditions are fulfilled.

Andrew Bell, Regency Chairman, comments: "In announcing that we have fulfilled our funding obligations under the Joint Venture Agreement, we take another small step in the gradual building out of our metallurgical coal mining interests in the U.S. We expect to make further announcements in relation to our coal investments, including in the Rosa Mine, shortly. The Loan Note has enabled us to carry out this funding without liquidating our marketable holdings, including our strategic holding in coal bed methane producer Curzon Energy plc."

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

For further information 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 020 7374 2212 Broker First Equity Limited

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 rns@lseg.com or visit www.rns.com.

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June 06, 2018 02:00 ET (06:00 GMT)