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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Regency Mines Plc | LSE:RGM | London | Ordinary Share | GB00BKM69866 | ORD 0.01P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.90 | 0.85 | 0.95 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
TIDMRGM
RNS Number : 3384U
Regency Mines PLC
29 March 2019
Hot Features
Premium
29 March 2019
Regency Mines Plc ("Regency" or the "Company"), the natural
resource exploration and development company with interests
in metallurgical coal, energy storage, battery metals and
natural gas, announces its unaudited half-yearly results for
the six months ended 31 December 2018.
Board Statement
Dear Shareholders,
The six-month period to 31 December 2018 witnessed the Company completing its investment in Mining Equity Trust ("MET"), and the joint venture with Legacy Hill Resources commencing coal production in Virginia from August 2018. Regency further supplemented its portfolio in December 2018 by agreeing to consider an option on a 50% stake in a North American Vanadium project, which completed after the period through exercise of the option as announced on 24 January 2019.
Operationally the six-month period proved largely disappointing with the MET joint venture failing to produce the levels of coal originally anticipated, with one highwall miner idled due largely to working capital and bonding deficiencies. Production has however trended upwards since the beginning of 2019, and the operator believes the operations have now been stabilized with the emphasis returning to increasing both internally produced tonnage as well as third party sales, alongside booting margins of each ton sold onward.
In Papua New Guinea, capital was largely unavailable to progress operations with the Company's joint venture partners during the period. However, application for the renewal of the EL1390 exploration licenses encompassing the project were submitted to the PNG authorities in early March 2019, and the accompanying Warden's Hearing is scheduled for late April 2019. A successful renewal of these licenses will cover the period June 2019 to June 2021, and the joint venture partners have proposed a work plan to focus on ground penetrating radar activities, upgrading the resource to the current 2012 JORC code, and studying opportunities to progress a direct shipping ore operation at the project.
Solid advancements were also made in the Company's 100% owned subsidiary EsTeq's investment in Allied Energy Services, where the future for energy storage and grid services in the UK appears particularly robust. Allied continues to progress planning permissions for multiple sites in the UK with a view to providing both grid management services as well as combined heat and power services.
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 9 "Financial Instruments" impact both the measurement and disclosures of financial instruments. The group has not retrospectively re-stated prior period. All investments into equity instruments, that were held by the Group at 30 June 2018, which were included into Available for sale financial assets line in the Statement of financial position at 30 June 2018, are held by the Group with a long-term view and are not held for trading. The Group has analysed its investments into equity instruments on investment-by-investment basis and took a decision to designate two of its Available for sale investments held at the date of IFRS 9 adoption as fair value through profit and loss (FVTPL) and the rest as fair value through other comprehensive income financial assets (FVTOCI). For equity instruments designated at FVTOCI under IFRS 9, only dividend income will be recognised in profit or loss, all other gains and losses will be recognised in OCI without reclassification on derecognition. More details are provided in note 7.
During the period investments in associates and joint ventures fell following the inclusion of losses from the MET joint venture in the United States. Short term borrowings rose from 2018 year end levels to reflect prepayment of convertible loan notes that after the period completed with total new borrowings at GBP676,000. Losses grew to GBP1,749,365 largely reflecting Regency's GBP1,301,157 share of the losses incurred by the US joint venture associate MET. Regency's overheads remained static demonstrating reduced costs of rent and payroll offset by slightly higher legal and marketing expenditures.
After the period the Company announced the refinancing and reprofiling of its outstanding loan note with institutional investors. The Company agreed to reprofile a portion of the existing debt into convertible loan notes, while delaying monthly repayments until May 2019 and shifting the majority of the repayment burden into 2020, the full details of which are available in Note 10.
Unfortunately, the Company has largely found itself unable to raise capital in 2019 to date due to an inability to pass resolutions at its annual general meetings disapplying pre-emption rights over any issuance that might have been envisioned. As the business model of Regency and that of most other small-cap natural resource exploration companies requires this authorization to access capital and the wider markets, the Company has been unable to completely meet its obligations to its lenders. Subsequently, the Company has issued 218,400,146 new shares to its lenders in partial satisfaction of these outstanding amounts.
Currently, the Company is working with its lenders to restructure the balance of its debts, and is seeking to agree a hold period of at least six months on the recent shares issued. The Company has further called for a general meeting to be held on 1 April 2019 in order to approve an expanded level of authorization better reflecting current pricing levels and an associated disapplication of pre-emption rights that the board feels are essential to move forward. At present the Board feels that constructive discussions continue with all stakeholders and that the Company expects it can meet its immediate funding requirements.
While the past several months have been an exceptionally disruptive period in the Company's history, the Board is currently exploring strengthening the management team with a coal industry expert who has expressed a willingness to contribute to the Company's pathway forward.
The Board remains confident that the Company retains a solid foundation of projects and assets from its interests in metallurgical coal production in the United States to its Nickel/Cobalt JORC resource at Mambare in PNG to its interests in EsTeq, which encompass battery metals and energy storage.
Following the vote at the general meeting scheduled for 1 April 2019, the Company intends to conduct a strategic review of its entire portfolio and will announce its conclusions as appropriate.
Board of Directors
Regency Mines PLC
29 March 2019
Consolidated statement of financial position
as at 31 December 2018
Notes 31 December 31 December 30 June
2018 2017 2018
Unaudited, Unaudited, Audited,
GBP GBP GBP
ASSETS
Non-current assets
Property plant and equipment 195 586 195
Investments in associates
and joint ventures 6 1,859,845 2,764,191 3,161,002
Goodwill 42,471 - 42,471
FVTOCI financial assets 7 195,465 - -
Available for sale financial
assets 7 - 1,249,980 1,099,572
Exploration assets - 40,402 -
Trade and other receivables 1,317,669 1,653,388 1,274,569
-------------
Total non-current assets 3,415,645 5,708,547 5,577,809
Current assets
Cash and cash equivalents 132,356 38,473 126,125
FVTPL financial assets 7 5,149 - -
Trade and other receivables 154,671 305,372 136,758
-------------
Total current assets 292,176 343,845 262,883
TOTAL ASSETS 3,707,821 6,052,392 5,840,692
EQUITY AND LIABILITIES
Equity attributable to
owners of the parent
Called up share capital 8 1,926,907 1,905,163 1,926,407
Share premium account 20,404,228 19,287,043 20,379,728
Other reserves (301,428) 472,679 440,693
Retained earnings (20,124,632) (16,374,292) (18,339,478)
-------------
Total equity attributable
to owners of the parent 1,905,075 5,290,593 4,407,350
Non-controlling interest 36,327 - 38,990
------------- ------------- -------------
Total equity 1,941,402 5,290,593 4,446,340
------------- ------------- -------------
LIABILITIES
Current liabilities
Trade and other payables 422,768 193,048 296,752
Short term borrowings 1,343,651 568,751 1,097,600
-------------
Total current liabilities 1,766,419 761,799 1,394,352
TOTAL EQUITY AND LIABILITIES 3,707,821 6,052,392 5,840,692
The accompanying notes form an integral part of these financial statements.
Consolidated statement of income
for the period ended 31 December 2018
Notes 6 months 6 months
to 31 December to 31 December
2018 2017
Unaudited, Unaudited,
GBP GBP
Revenue
Management services - -
- -
Administrative expenses 3 (266,873) (257,515)
Impairment of investment in joint
ventures 6 - (821,566)
Gain on sale of investments 38,491 1,485,611
Share of gains in associates and (1,301,157) -
joint ventures
Exploration expenses (73,529) -
Foreign currency gain 7,227 -
Other income 10,567 59,621
Finance costs, net (164,091) (44,854)
--------------------
Loss for the period before taxation (1,749,365) 421,297
Tax expense - -
---------------- --------------------
Loss for the period after taxation (1,749,365) 421,297
---------------- --------------------
(Loss)/profit for the period attributable
to:
Equity holders of the parent (1,746,702) 421,297
Non-controlling interest (2,663) -
---------------- ----------------
(1,749,365) 421,297
---------------- ----------------
Earnings per share
(Loss)/profit per share - basic 4 (0.22) pence 0.07 pence
(Loss)/profit per share - diluted 4 (0.22) pence 0.07 pence
The accompanying notes form an integral part of these financial statements.
Consolidated statement of comprehensive income
for the period ended 31 December 2018
6 months 6 months
to 31 December to 31 December
2018 2017
Unaudited, Unaudited,
GBP GBP
(Loss)/profit for the period (1,749,365) 421,297
Revaluation of available for sale
investments - (335,700)
Change in reserves due to IFRS 9 adoption 38,452 -
Revaluation of FVTOCI investments (791,012) -
Unrealised foreign currency gain/(loss)
arising upon retranslation of foreign
operations 10,439 (95,193)
Total comprehensive loss for the period (2,491,486) (9,596)
The accompanying notes form an integral part of these financial statements.
Consolidated statement of changes in equity
for the period ended 31 December 2018
The movements in equity during the period were as follows:
Share Share Retained Other Total Non-controlling Total
capital premium earnings reserves Equity interests equity
account attributable
to owners
of the
Parent
GBP GBP GBP GBP GBP GBP GBP
As at 30 June
2017 1,904,933 19,272,873 (16,795,589) 895,947 5,278,164 - 5,278,164
Changes in
equity
for 2017
Profit/ (loss)
for
the period - - 421,297 - 421,297 - 421,297
Other
comprehensive
(loss)/income
for
the period - - - (430,894) (430,894) - (430,894)
Transactions
with
owners
Issue of shares 230 14,170 - - 14,400 - 14,400
Share issue and - - - - - - -
fundraising
costs
Share-based
payment
transfer - - - 7,625 7,625 - 7,625
Total
Transactions
with owners 230 14,170 - 7,625 22,025 - 22,025
As at 31
December
2017 1,905,163 19,287,043 (16,374,292) 472,679 5,290,593 - 5,290,593
---------- ----------- ------------- ------------ -------------- ---------------- ------------
As at 30 June
2018
(audited) 1,926,407 20,379,728 (18,339,478) 440,693 4,407,350 38,990 4,446,340
Reserves
transfer
on IFRS9 first
time
adoption - - (38,452) 38,452 - - -
---------- ----------- ------------- ------------ -------------- ---------------- ------------
As at 1 July
2018
(restated) 1,926,407 20,379,728 (18,377,930) 479,145 4,407,350 38,990 4,446,340
Changes in
equity
for 2018
Profit/ (loss)
for
the period - - (1,746,702) - (1,746,702) (2,663) (1,749,365)
Other
comprehensive
(loss)/income
for
the period - - (780,573) (780,573) - (780,573)
Transactions
with
owners
Issue of shares 500 24,500 - - 25,000 - 25,000
Share issue and - - - - - - -
fundraising
costs
Total
Transactions
with owners 500 24,500 - - 25,000 - 25,000
As at 31
December
2018 1,926,907 20,404,228 (20,124,632) (301,428) 1,905,075 36,327 1,941,402
---------- ----------- ------------- ------------ -------------- ---------------- ------------
Available-for-sale FVTOCI Share-based Foreign Total
investments investments payments currency other
reserve reserve reserve translation reserves
reserve
GBP GBP GBP GBP
As at 30 June 2017 326,097 - 65,857 503,993 895,947
Changes in equity for six
months ended 31 December 2017
Total comprehensive income/(loss)
for the period (335,700) - - (95,193) (430,893)
Transaction with owners
Share-based payment - - 7,625 - 7,625
------------------- ------------- ------------ ------------- ----------
As at 31 December 2017 (9,603) - 73,482 408,800 472,679
As at 30 June 2018 (159,521) - 75,854 524,360 440,693
Reserves transfer on IFRS
9 first time adoption
AFS reserves transferred to
Retained Earnings in relation
to FVTPL investments 38,452 - - - 38,452
AFS reserves transferred to
new FVTOCI investments reserve 121,069 (121,069) - - -
------------------- ------------- ------------ ------------- ----------
As at 1 July 2018 (restated) - (121,069) 75,854 524,360 479,145
Changes in equity for six
months ended 31 December 2018
Other Comprehensive income
Revaluation of FVTOCI investments - (791,012) - - (791,012)
Unrealised foreign currency
gains arising upon retranslation
of foreign operations - - - 10,439 10,439
------------------- ------------- ------------ ------------- ----------
Total comprehensive income/(loss)
for the period - (791,012) - 10,439 (780,573)
As at 31 December 2018 - (912,081) 75,854 534,799 (301,428)
------------------- ------------- ------------ ------------- ----------
Consolidated statement of cash flows
for the period ended 31 December 2018
Note 6 months 6 months
to 31 December to 31 December
2018 2017
Unaudited Unaudited
GBP GBP
Cash flows from operating activities
(Loss)/profit before taxation (1,749,365) 421,297
(Increase)/decrease in receivables (67,976) (601,465)
(Decrease) in payables 127,605 (208,584)
Share of loss of associates and 1,301,157 -
joint ventures, net of tax
Impairment in JVs 6 - 821,566
Share based payments charge - 22,025
Broker's fee received in Curzon
Energy Plc's shares - (28,000)
Reversal of prior year impairment - (21,614)
Interest payable 164,091 44,854
Currency adjustments (7,227) -
Gain on sale FVTPL investments (38,491) -
Gain on sale of available-for-sale
investments 7 - (1,485,611)
PPE write off/Depreciation - 14,934
Net cash flows from operations (270,206) (1,020,598)
Cash flows from investing activities
Proceeds from sale of available-for-sale
investments - 1,719,126
Proceeds from sale of FVTPL investments 146,437 -
Payments to acquire available-for-sale
investments - (400,000)
Net cash flows from investing activities 146,437 1,319,126
Cash flows from financing activities
Proceeds from issue of shares 30,000 -
Interest paid - (44,854)
Loans received 100,000 -
Repayment of borrowings - (224,377)
Net cash flows from financing activities 130,000 (269,231)
Net increase in cash and cash equivalents 6,231 29,297
Cash and cash equivalents at the
beginning of period 126,125 9,176
Cash and cash equivalents at end
of period 132,356 38,473
Half-yearly report notes
for the period ended 31 December 2018
1 Company and Group
As at 30 June 2018 and 31 December 2018 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 2019.
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 2018 has been extracted from the
statutory accounts of the Group for that year. Statutory
accounts for the year ended 30 June 2018, 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 2018, 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 9 "Financial Instruments" impact both the measurement
and disclosures of financial instruments. The group has
not retrospectively re-stated prior period. All investments
into equity instruments, that were held by the Group at
30 June 2018, which were included into Available for sale
financial assets line in the Statement of financial position
at 30 June 2018, are held by the Group with a long-term
view and are not held for trading. The Group has analysed
its investments into equity instruments on investment-by-investment
basis and took a decision to designate two of its Available
for sale investments held at the date of IFRS 9 adoption
as fair value through profit and loss (FVTPL) and the rest
as fair value through other comprehensive income financial
assets (FVTOCI). For equity instruments designated at FVTOCI
under IFRS 9, only dividend income will be recognised in
profit or loss, all other gains and losses will be recognised
in OCI without reclassification on derecognition. More details
are provided in note 7.
IFRS 15 "Revenue from Contracts with Customers" - the Group
is pre-revenue hence the adoption had no impact on the reported
results or opening reserves.
Half-yearly report notes
for the period ended 31 December 2018, continued
3 Administrative expenses
6 months to 6 months
31 December to
2018 31 December
2017
Unaudited Unaudited
GBP GBP
Staff Costs:
Payroll 92,391 104,875
Pension 6,099 6,353
Consultants 14,400 7,500
HMRC / PAYE 1,446 8,813
Professional Services:
Accounting 21,891 15,530
Legal 16,260 -
Marketing 19,044 2,588
Other 10,050 7,800
Regulatory Compliance 34,179 32,365
Travel 7,626 2,029
Office and Admin Costs:
General 5,569 24,651
IT related costs 4,582 3,709
Rent 31,184 41,302
Insurance 2,152 -
------------- -------------
Total administrative expenses 266,873 257,515
------------- -------------
Half-yearly report notes
for the period ended 31 December 2018, continued
4 Loss per share
The following reflects the profit/(loss) and share data
used in the basic and diluted profit/(loss) per share computations:
6 months to 6 months to
31 December 31 December
2018 2017
Unaudited, Unaudited,
GBP GBP
(Loss)/profit attributable to
equity holders of the parent
company (1,746,700) 421,297
Weighted average number of Ordinary
shares of GBP0.0001 in issue,
used for basic EPS 786,831,847 576,805,818
Effect of dilutive options - 5,330,000
-------------- --------------
Weighted average number of Ordinary
shares of GBP0.0001 in issue
inclusive of outstanding dilutive
options 786,831,847 582,135,818
(Loss)/profit per share - basic (0.22) pence 0.07 pence
(Loss)/profit per share - fully (0.22) pence 0.07 pence
diluted
Options and warrants with all conditions met, that were
also in the money at the end of each respective period:
6 months 6 months to
to 31 December
31 December 2017
2018
Unaudited, Unaudited,
GBP GBP
Share options granted to employees,
fully vested and in the money
at the end of the respective period - 5,330,000
Warrants given to shareholders
as a part of placing equity instruments, - -
fully vested and in the money
at the end of the respective period
-------------- ------------------
Total instruments fully vested
and in the money - 5,330,000
-------------- ------------------
At 31 December 2018, the effect of all the instruments (fully
vested and in the money) 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 with conditions not met at the end
of the period, 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 6 months to
to 31 December
31 December 2017
2018
Unaudited, Unaudited,
GBP GBP
Share options granted to employees
- not vested and/or out of the
money 27,060,000 21,730,000
Warrants given to shareholders
as a part of placing equity instruments
- not all conditions met and/or
out of the money 435,857,375 236,685,670
-------------- ------------------
Total options and warrants with
not all conditions met and/or
out of the money 462,917,375 258,415,670
-------------- ------------------
Total number of instruments in
issue not included into the fully
diluted EPS calculation 463,917,375 258,415,670
-------------- ------------------
Half-yearly report notes
for the period ended 31 December 2018, continued
5 Segmental analysis
Since the last annual financial statements, the Group has
re-considered its operational segments. Two new segments
were added: US Coal Production and Papua New Guinea Exploration.
For the US Coal Papua Battery Other Corporate
six-month (MET associate) New Guinea storage, projects and
period to 31 Exploration battery (Curzon) unallocated Total
December (Oro Nickel materials
2018 JV) and energy
storage
technology
GBP GBP GBP GBP GBP GBP
Revenue - - - - - -
Result
Segment
results (1,342,235) (32,451) (23,332) - (187,256) (1,585,274)
---------------- ------------- ------------ ---------- ------------- --------------
Loss before
tax
and finance
costs (1,585,274)
Interest -
receivable
Interest
payable (164,091)
Loss for the
period
before
taxation (1,749,365)
Taxation -
expense
--------------
Loss for the
period
after
taxation (1,749,365)
--------------
Total assets
at
31 December
2018 234,671 2,942,843 195,953 119,649 214,706 3,707,821
---------------- ------------- ------------ ---------- ------------- --------------
For the US Coal Papua Battery Other Corporate
six-month (MET associate) New Guinea storage, projects and
period to 31 Exploration battery (Curzon) unallocated Total
December (Oro Nickel materials
2017 JV) and energy
storage
technology
GBP GBP GBP GBP GBP GBP
Revenue - - - - - -
---------------- ------------- ------------ ---------- ------------- --------------
Result
Segment
results - - - - 466,151 466,151
---------------- ------------- ------------ ---------- ------------- --------------
Loss before
tax
and finance
costs 466,151
Interest -
receivable
Interest
payable (44,854)
--------------
Profit for
the
period
before
taxation 421,297
Taxation -
expense
--------------
Profit for
the
period after
taxation 421,297
--------------
Total assets
at 31 December
2017 - 2,915 - 606,328 2,530,588 6,052,393
----------------- ------------- ------------ ---------- ------------- ------------
Half-yearly report notes
for the period ended 31 December 2018, continued
6 Investments in associates and joint ventures
31 December 31 December 30 June
2018 2017 2018
Unaudited Unaudited Audited
GBP GBP GBP
At the beginning of the period 3,161,002 3,585,757 3,585,757
Additions - - 1,503,377
Share of loss for the period (1,301,157) - -
using equity method
Impairment - (821,566) (1,928,132)
At the end of the period 1,859,845 2,764,191 3,161,002
------------ ------------ ------------
7 Financial assets - reclassification on IFRS 9
adoption
31 December 31 December 30 June
2018 2017 2018
Unaudited Unaudited Audited
GBP GBP GBP
Available for sale financial
instruments at the beginning
of the period (audited) 1,099,572 1,443,707 1,443,707
Transferred to FVTPL category (113,096) - -
on 1 July 2018
Transferred to FVTOCI category (986,476) - -
on 1 July 2018
Additions - 936,502 1,336,502
Disposals - (1,166,442) (1,318,181)
Revaluations - 14,598 (163,597)
Impairment - - (215,372)
Reversal of impairment - 21,614 16,513
Available for sale financial
assets at the end of the
period (unaudited) - 1,249,979 1,099,572
------------ ------------ ------------
31 December 31 December 30 June
2018 2017 2018
Unaudited Unaudited Audited
GBP GBP GBP
FVTOCI financial instruments - - -
at the beginning of the period
Transferred from Available 986,476 - -
for sale category
Revaluations (791,011) - -
FVTOCI financial assets at 195,465 - -
the end of the period (unaudited)
------------ ------------ ---------
31 December 31 December 30 June
2018 2017 2018
Unaudited Unaudited Audited
GBP GBP GBP
FVTPL financial instruments - - -
at the beginning of the period
Transferred from Available 113,096 - -
for sale category
Disposals (107,947) - -
FVTPL financial assets at 5,149 - -
the end of the period (unaudited)
------------ ------------ ---------
Half-yearly report notes
for the period ended 31 December 2018, continued
8 Share Capital of the company
The share capital of the Company is as follows:
Number Nominal,
GBP
Allotted, issued and fully paid
Deferred shares of GBP0.0009 each 1,788,918,926 1,610,027
A deferred shares of GBP0.000095 each 2,497,434,980 237,256
Ordinary shares of GBP0.0001 each 791,239,654 79,124
----------
As at 30 June 2018 1,926,407
Issued ordinary shares on 6 December
2018 at 0.5 pence per share 5,000,000 500
----------
Deferred shares of GBP0.0009 each 1,788,918,926 1,610,027
A deferred shares of GBP0.000095 each 2,497,434,980 237,256
Ordinary shares of GBP0.0001 each 796,239,654 79,624
At 31 December 2018 1,926,907
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 2018, continued
10 Subsequent events
Loan Note Refinancing and Convertible Loan Notes
On 14 January 2019 the Company announced that it had raised GBP676,000 by the issue of GBP676,000 of convertible loan notes with accompanying warrants to institutional and high net worth investors. Further to the announcement of 6 June 2018 the Company announced the partial repayment and restructuring of the US$1,600,000 outstanding loan note.
The convertible loan notes were issued at par and were convertible into ordinary shares of GBP0.0001 at a price of GBP0.00042 per share. Each note has denomination of GBP1,000 and is thus convertible 238,095 shares in the Company. Conversion may take place at any time up to the final redemption date of 30 May 2020. Each noteholder also receives 119,047 warrants for each note subscribed, and each warrant entitles the holder to subscribe for one share at any time up to 31 May 2021 at a price of GBP0.006 per share. Up to GBP1,100,000 of notes may be issued tranches.
The Company further announced that it had amended the terms of its US$1,600,000 loan note with the following provisions now in place:
o A US$580,000 repayment will be made following execution of the Deed, of which $500,000 will then be subscribed by the Lenders for 395 of the convertible loan notes at a cost of GBP395,000;
o A US$160,000 repayment will be made from the proceeds of any third-party financing including the issue of any further tranche of the Notes;
o The Extension Fee and $20,000 of a restructuring fee of US$156,000 ("Restructuring Fee") becomes immediately payable in respect of which the lenders have subscribed for 22,571,428 new Shares in Regency at a price of 0.35 pence per Share;
o The balance of the restructuring fee becomes payable at maturity of the Loan ("Maturity") which is extended to 28 February 2020 at an interest rate of 12% p.a.;
o From May 2019 to February 2020 Regency will make monthly payments of principal and interest amounting to US$50,000 per month;
o Bullet payment of balance including interest and the aforementioned balance of the Restructuring Fee at Maturity;
o Should the Company complete any financing transaction over GBP200,000 while Loan amounts remain outstanding, one third of net proceeds shall be applied to early repayment of the Loan.
Acquisition of North American Vanadium Project
On 24 January 2019 the Company announced that it had exercised its option to acquire a 50% interest in a North American vanadium project.
o The Project includes 196 claims covering 40.96 square kilometres covering a mineralised trend with up to 20 kilometres of potential strike;
o All points on the property lie within 1.8km of the Dempster Highway, some 65 km north of the Eagle River Lodge, northern Yukon;
o The target is primary vanadium in black shale and historic exploration includes soil, silt & rock sampling which outlined numerous broad zones of strongly anomalous vanadium. Drill testing of the targets, although limited to date, identified multiple vanadium bearing intervals;
o The Project has been transferred by the Vendor into a newly incorporated special purpose vehicle, DVY196 Holdings Corp ("DVY"), in which Regency now acquires 50% at a price of CAD 450,000 from the Vendor ("Consideration");
o The Vendor has agreed to subscribe for 53,109,600 new ordinary shares ("Shares") in Regency at a fixed price of 0.50 pence per Share, which at an agreed exchange rate of GBP 1/CAD 1,695) enables Regency to satisfy the Consideration;
o Regency Mines plc will be the operator of the Project;
o Further information on the transaction terms is provided below and the Company will provide further updates to the market in respect of this opportunity in the near term.
o Principal Transaction Terms:
o The CAD450,000 (agreed as equivalent to GBP265,548) consideration is as a result of the subscription payable in new Regency Mines plc ordinary shares at a price of GBP0.005 equating to 53,109,600 shares (the "Subscription Shares") and representing approximately 6.05% of the total number of issued shares post transaction.
o RGM will be prohibited from selling their 50% interest in the Project for a period of 12-months post-acquisition and thereafter the Vendors will retain a first right of refusal to acquire Regency's interest on the same terms as any disposal agreement achieved by Regency.
o The Subscription Shares distributed to the Vendor will be subject to:
o A 4 month holding period where the shares may not be traded except subject to the exceptions below:
o Should RGM close at above GBP0.008 for 7 consecutive trading days, the Vendor has the right to sell 25% of its position.
o Should RGM close at above GBP0.01 for 7 consecutive trading days, the Vendor has the right to sell a further 25% of its position.
o In-Country Management
o The Project will be held by DVY.
o The Vendor will have the right to nominate two directors to the board of DVY and will appoint the company secretary & legal counsel.
o All contracts of work are to be awarded to agreed technical consultants on an arm's length commercial basis.
o Regency has the right to nominate two members to the Board of DVY.
o Regency are to be appointed the operator of the Project.
o Expenditure and Dilution
o Regency will commit to and fund a minimum spend of CAD$150,000 exploration in the 12 months post acquisition and upon completion of the required spend of CAD$150,000 the joint venture will revert to a shared funding or dilution agreement in line with standard industry practice.
o Should Regency fail to expend on a pro-rata basis CAD$950,000 or more within 24 months of acquisition (net of CAD$150,000), the original syndicate have the right to reacquire 40% of Regency's interest in the Project for Regency's then book cost.
o Vendor's Residual Interests
o The residual 50% DVY interest will vest in a UK private company representing the Vendor interests.
o The Vendor will receive a 3% NSR royalty (held within the above UK private company).
o RGM have the right of first refusal to purchase within three months of first commercial production 1% of the NSR for cash consideration of GBP1,000,000.
o Vendor to receive cash/equity (50:50) of CAD$250,000 upon the release of a compliant maiden resource.
o Vendor to receive cash/equity (50:50) of CAD$1,500,000 upon commercial production.
o Vendor to receive cash/equity (50:50) of CAD$500,000 upon a Decision to Proceed following a feasibility study.
Loan Conversion
On 15 March 2019 the Company announced that it had received notice of the partial conversion of $105,705 of its outstanding $1,279,800 loan note originally announced on 6 June 2018 and then refinanced on 14 January 2019. The Company therefore issued 97,292,904 new ordinary shares of 0.01p at a price of GBP0.000823. This price was calculated under the terms in effect from the original agreement following an initial six-month period where the conversion occurs on the basis of an amount equal to 90% of the lowest daily VWAP over the five trading days immediately preceding the conversion notice being submitted.
On 25 March 2019 the Company announced that it had received notice of the partial conversion of $117,138.36 of its outstanding $1,115,000 loan note originally announced on 6 June 2018 and then refinanced on 14 January 2019. The Company therefore issued 121,107,242 new ordinary shares of 0.01p at a price of GBP0.000729. This price was calculated under the terms in effect from the original agreement following an initial six-month period where the conversion occurs on the basis of an amount equal to 90% of the lowest daily VWAP over the five trading days immediately preceding the conversion notice being submitted. The Parties further announced that they were in discussions regarding the conditions of a hold period on these shares.
For further information contact:
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.
END
IR SEEFFAFUSEFD
(END) Dow Jones Newswires
March 29, 2019 03:00 ET (07:00 GMT)
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