Regency Mines Corporate Presentation€¦ · Plans to Wash 72,000 Tons External Coal in Year 1...

Regency Mines

Corporate PresentationLondon Stock Exchange AIM Listed: RGM

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www.regency-mines.com Regency Mines PLC : AIM RGM

MotzfeldtNiobium + Tantalum JORC Resource

Significant Upside Potential

MambareNickel JORC Resource

Large Scale and 3% Explored to Date

Horse HillOnshore UK Oil and Gas Exploration

Weald Basin – Gatwick Airport

Curzon Energy PlcCoal Bed Methane Project, Oregon, USA

Upcoming Listing in the UK


US Met Coal Assets1 Asset Secured – 2 x In Progress

Production to Begin Q2

Company Overview

Coal Bed Methane and Onshore UK Oil Exploration

Oil and Gas

Met Coal Production

Nickel in PNG and Niobium/Tantalum

in Greenland

Mining

Focus on Cash Generative Assets

with Outsized Returns

Investments

Value Creation Through Joint Ventures and

Disposals

Transactions


Diverse Investor Exposure

PROJECTSMINERAL

Rosa Metallurgical Coal Investment


01

02

03

04

20% InterestInvestment in Carbon Minerals CorporationExperienced Coal Mgmt Team Existing Mine w/ Infrastructure

Located in the Warrior Coal Basin Blount Country, Alabama, USAMultiple Regional Offtake Partners

Year 1 Target: 100,000 Tons of CoalConservative: $130 Met Coal$13m in Revenue - $8.7m in EBITDAStrong Met Coal Prices

Over 6,000 Tons of Coal Washed Q1 2017Plans to Wash 72,000 Tons External Coal in Year 1 Highwaller Contractor On Site, Ready to Start Operations

Attractive Fundamentals

Historic Coal District

Production – Cash Generation


Wash PlantEquipment in Place ~$10-12m ValueWash Coal for 3rd Parties @ $8/ton85% Clean Tons Recovery Expected

Simple Extraction ProcessMultiple Augers or Highwaller w/ Auger Head100,000 tons in Year 1120,000+ tons in Thereafter Highwaller Could Allow 600,000t+ p/a

Rosa Coal Seam – Avg 16-22in Thickness

Conducted by Calvert and Marsh 5m+ Tons Mined Through 1978Over 2,500 acres of Rosa Seam MinedMining to Take Place Along Existing Highwall

Surface Mined 1960s-80s

1.81% Ash26.20 % VM71.91% FC0.85% SUL

Avg Rosa Coal Quality

Auger ($3/t) 300ft Depth

Highwall ($25/t)~1,000ft Depth

Rosa Metallurgical Coal Mine


Production Level

2,155,540 25.00% 50.00% 100.00% 125.00% 150.00%

50.00$ -97,460 $ 109,540$ 523,540$ 730,540$ 937,540$

Coal Price 100.00$ 157,540$ 619,540$ 1,543,540$ 2,005,540$ 2,467,540$

150.00$ 412,540$ 1,129,540$ 2,563,540$ 3,280,540$ 3,997,540$

200.00$ 667,540$ 1,639,540$ 3,583,540$ 4,555,540$ 5,527,540$

Met Coal Prices Hit Multi-Year High in 2016 - $308/t

US Expected to Increase Coking Coal Production in 2017 +9m Tons

Prices Off Highs – Still 130% Up from Multi-Year Lows

Metallurgical Coal – 2017 Consensus $143/tAssumptionsBase Case: 120,000 tpa Saleable = 100%Results in USD Attributable to RGMShareholder Agreement – 50% Div Policy

Rosa Financial Projections

ROSA MINE OVERVIEWOneonta, AL

Wash Fines Pond

Prep (wash) Plant and Stockyard

Weighbridge/Office

Road/Bench goes round hill

Scale Bar

High wall

Gate

Silt Pond

Silt Pond

Pond (to Plant)

Pond (from Plant)

Pond (from Fines Pond)

Direction of Mining into Hill


Reserves in 6,500 Acres Property –Larger and Earlier Stage

Thick Seams Suitable for Contour and Highwall Mining

RGM Conducting Due-Diligence and Finalizing Transaction Terms

MOA on Mixed-Grade Coal – AL, USA

RGM Coal Asset Pipeline

Located in Historical Coal District

Mix of Metallurgical and Thermal Coal

Mixed-Grade Coal – Appalachians, USA

20%

Holding

25%

HoldingAcquisition Being Finalized Through Vali Carbon Corporation

o JORC Inferred Mineral Resource of 340Mt @ 120ppm Ta2O5, 4,600ppm ZrO2, and 1,850ppm Nb2O5

o Multi-element project - niobium (Nb), tantalum (Ta), rare earth elements (REE) – significant in-situ value

o World’s largest Undeveloped Niobium-Tantalum deposits - 24km to an international airport

o Acquired for Nominal Cost (~£2.5k) – Several Millions Spent Historically

o Minimal Spend to Hold Licenses– On Care and Maintenance – Seeking Partners


Motzfeldt – Multi Element Project

WORLDWIDE BUSINESS

o Agreed with Value Generation Ltd

o 4 Month Option Duration

o £350k Cash to RGM + 1.25% GRR

o “On-Sale” Clauses for 18 Months

£500k if over £5m

£1m if over £10m

Option Agreement –Feb ‘17

o Lateritic nickel-cobalt exploration in Mambare Plateau, PNG

o One of World’s Largest Laterite Deposits – 3% Drill Tested –Significant Upside Potential

o 50:50 Joint Venture between RGM and Direct Nickel Ltd (Additional 1.36% indirect stake through DNI)

o JORC compliant Mineral Resource Estimate (MRE) announced 2012

o 162.5 Mt @ 0.94% Ni and 0.09% Co (combined Indicated & Inferred)

o 47 MT @ 1.23% Ni and 0.08% Co

o Mambare Licensed to use the DNi Process – 40,000t p/a

Kokoda Township

Plateau

EL1390


Mambare Nickel Laterite Project

WORLDWIDE BUSINESS

o Designed to Process Nickel Laterites

o Tested at Pilot Plant Scale, Perth, AUS

o Uses Nitric Acid – 95% Recycled

o Sustainable and Cost Effective

o Low CAPEX and OPEX

o Unlocks World’s Lateritc Nickel Resources

Direct Nickel Process

& GASOIL

Cumulative Flow Test Rate(3 zones)

1,688 BOPD

900 BOPD

Exciting onshore O&G prospect in the UK – PEDL 137

RGM’s Stake3.25%

Upper Portland

Lower Portland

Lower Kimmeridge

Upper KimmeridgePrimary focus lies on Kimmeridge Limestones and Portland Sandstones

90-day extended production tests planned for early 2017

Permission sought for 2 x well drilling phase – deviated sidetrack of existing HH-1 well + HH-2

463 BOPD

323 BOPD

Flow Test Results By Horizon

Horse Hill Overview

HH-1 drilled to 2,646m to test for conventional stacked targets and a

deeper gas target

Sept 2014 Oct 2014 2015 2016 2017

HH-1 WellDrill Results

Gross Oil In PlaceInitial Flow Tests

Long Term Flow Tests

Results: P50 of 3.1mmbls of gross in place hydrocarbons in

Upper Portland and 16.8mmbbls in lower

Portland

Focus shifts to Kimmeridge Clays –

8,262mmbls OIIP estimated

1,688 BOPD – highest aggregate stable dry-oil flow from any onshore

UK new field

Long-term flow tests planned for H1

Horse Hill Timeline

Coal Bed Methane Gas Project – Acquired out of Bankruptcy645 BCF Gas in Place 273 BCF of 2C contingent resources recoverableCoos Bay, Oregon, USA – 50,000 acresCurzon Energy Plc to be listed in London at £4.8m valuation

Historic Spend Over $75mPre-IPO raised £650k Q3 2016IPO set to raise £2.4m+ in 2017 w/ listing on LSEFunds to Confirm Initial Project Commerciality

Historic Gas Price Premium to US Henry Hub – 16 YearsReady Access to Regional Pipeline and Gas Network Low Cost Drilling on Industrial Logging Land

Potential for free cash flow of $24m+ in 5 years - $200m+ valuation First gas in under 6 months – 2017 Revenue of $1.25m expectedTargeting 6-7x uplift with current assets

OR, USA

RGM: £250k

~10% Stake

$125k to RGM


Curzon Energy Plc Overview


Local well test rate of 100Mscf/day seen

Mid case 500 MMscf per well ultimate recovery

5 Existing Wells

Typical Well Costs: $350k~2,500ft depth 5-10 zones

2 x New WellsPhase I

Crosses the property / ready for connection

Feeder line connects to interstate line

Coos Bay Gas Pipeline (12in)

Upper Coaledo

Two Horizons

Lower Coaledo

58 x New WellsPhase II

200 x New WellsPhase III

Local gas prices $5/Mscf – $2/Mscf premium to US Henry Hub

16 year track record of premium pricing

“First Gas” Expected in Under 6 Months

Curzon Development Potential

IRR 55.4%

CAPEX Per Well

$320k

500MMscf ultimate recovery Peak rate of 150 Mscf/day

New Well Completed in Upper and Lower Coaledo with stimulation

Takes advantage of low drilling costs and preconstructed pads

Curzon Type Well Economics – Mid Case


NPV10

$703k

Payout

1.6 Years

Peak Rate

150Mscf/day

Phase I (Mid Case)7 Wells1.8 BCF$8.3m Net Revenue$1.1m CAPEX$1.6m OPEXPayout in 1.7yrs

108%

58.4%

5 Year Plan (Mid Case)130 Mscf/Day$30.9m in net annual revenueIncludes Royalty, G&A, OPEXGoal is $200m valuation

200

IRR

Phase I + II (Mid Case)65 Total Wells30.8 BCF$141m Net Revenue$19.7m CAPEX$29.4m OPEXPayout in 4.4yrs

IRR

Wells

Curzon Project – Well Economics

20

o US gas production continues to increaseo LNG export markets continue to grow – China, S.Korea, Japano LNG rising 6-8%pa as countries shift to lower carbon fuelso World natural gas supply should go into deficit by end of 2016

CBM Former “Miner’s Curse” now an exciting commercial success story

Dramatic Transformation10%

CBM fields usually increase to peak production after 6-18 months then decline like conventional reservoir

Production Profile

Of US natural gas production comes from coal bed methane (CBM)

The “Fuel of the Future” – Cleanest Fossil Fuel and Key Part of US Energy Supply

Natural Gas

Coal is both reservoir rock and source rock for methane

Coal Bed Methane

CO2 emissions 40-50% lower than coal and 25-35% lower than petroleum

Natural Gas

Natural Gas – Coal Bed Methane

INVESTMENTSOTHER


1.94%

Key Asset: Jupiter Mines Producing Manganese Mine - South Africa

Gold JORC resource in KenyaIron JORC resource in Greenland

Oil Production in the USA

Red Rock Resources PLC (AIM:RRR)

Holding

75%

Developer of Nickel Processing Technology

Exposure to Planet Minerals Ltd –Gold Exploration in Africa

Partner at Mambare, PNG Nickel Project – RGM Indirect Stake 1.36%

DNI Technologies Pty Ltd

Holding

2.71%

Other Investments

Received £537,131 From Jupiter Share Buy-back – JMS Exploring Exit

Options for Tshipi Asset

Curzon Plc IPO London Stock

Exchange

Horse Hill Long Term Flow Tests to Begin


Conclude Due DiligenceTwo New Coal

Projects in USA

April

Investor Timeline and Key Events

May

June MotzfeldtOption


Investing at Bottom of Cycle Valuations

Focus on Cash Generation - Production

Exploration Holdings w/ Upside

Foundation for Outperformance

Summary

London Stock Exchange AIM listing: AIM:RGM

Share Price: 1.20p

Market Capitalisation: £6.20m

Shares in Issue: 516,918,631

Directors:Andrew Bell Chairman and CEOScott Kaintz Director and COOEdmund Bugnosen Non-Executive Director

Corporate Advisers:Nominated Adviser Beaumont Cornish LtdAuditors Chapman Davis LLPAIM Broker Dowgate Capital Stockbrokers Ltd Solicitors Ronaldsons LLP

Company Secretary: Stephen Ronaldson

Further Information

@Regency_Mines

Further InformationAndrew BellChairman and CEO

Email: [email protected]

Scott KaintzDirector and COO

Email: [email protected]

Registered Office:55 Gower Street

London

WC1E 6HQ UK

Incorporated in England and Wales

Company No. 05227458

Business and Postal Address:Ivybridge House

1 Adam Street

London

WC2N 6LE UK

Phone: +44 (0)207 747 9960

mailto:[email protected]

mailto:[email protected]

Regency Mines Corporate Presentation€¦ · Plans to Wash 72,000 Tons External Coal in Year 1...

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