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Regulatory Story
Company Regency Mines PLC
TIDM RGM
Headline Half-year Report
Released 07:00 29-Mar-2019
Number 3384U07

RNS Number : 3384U
Regency Mines PLC
29 March 2019
 

 

 

 

 

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 £676,000.  Losses grew to £1,749,365 largely reflecting Regency's £1,301,157 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 2018

 

31 December 2017

 

30 June 2018

 

 

Unaudited, £

 

Unaudited, £

 

Audited, £

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 to 31 December 2018

 

6 months to 31 December 2017

 

 

 

Unaudited, £

 

Unaudited, £

 

 

 

 

 

 

 

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 joint ventures

 

(1,301,157)

 

-

 

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 to 31 December 2018

 

6 months to 31 December 2017

 

 

Unaudited, £

 

Unaudited, £

 

 

 

 

 

 

 

 

 

 

(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 capital

Share premium account

Retained earnings

Other reserves

Total Equity attributable to owners of the Parent

Non-controlling interests

Total equity

 

£

£

£

£

£

£

£

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 investments reserve

FVTOCI investments reserve

Share-based payments reserve

Foreign currency translation reserve

Total other reserves

 

£

 

£

£

£

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 to 31 December 2018

 

6 months to 31 December 2017

 

 

Unaudited

£

 

Unaudited

£

 

 

 

 

 

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 joint ventures, net of tax

 

1,301,157

 

-

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

 31 December 2018

 

6 months to

 31 December 2017

 

 

Unaudited

£

 

Unaudited

£

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

 31 December 2018

 

6 months to

 31 December 2017

 

 

Unaudited, £

 

Unaudited, £

 

 

 

 

 

 

(Loss)/profit attributable to equity holders of the parent company

(1,746,700)

 

421,297

 

 

 

 

 

 

Weighted average number of Ordinary shares of £0.0001 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 £0.0001 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 diluted

(0.22) pence

 

0.07 pence

 

 

 

 

 

 

 

Options and warrants with all conditions met, that were also in the money at the end of each respective period:

 

 

 

6 months to

 31 December 2018

 

6 months to

 31 December 2017

 

 

Unaudited, £

 

Unaudited, £

 

 

 

 

 

 

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 to

 31 December 2018

 

6 months to

 31 December 2017

 

 

Unaudited, £

 

Unaudited, £

 

 

 

 

 

 

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 six-month period to 31 December 2018

US Coal (MET associate)

Papua New Guinea

Exploration (Oro Nickel JV)

Battery storage, battery materials and energy storage technology

Other projects (Curzon)

Corporate and unallocated

 

 

Total

 

 

£

£

£

£

£

£

 

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 six-month period to 31 December 2017

US Coal (MET associate)

Papua New Guinea

Exploration (Oro Nickel JV)

Battery storage, battery materials and energy storage technology

Other projects (Curzon)

Corporate and unallocated

 

 

Total

 

 

£

£

£

£

£

£

 

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 2018

Unaudited

£

31 December

2017

Unaudited

£

30 June

2018

Audited

£

 

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 using equity method

(1,301,157)

-

-

 

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 2018

Unaudited

£

31 December

2017

Unaudited

£

30 June

2018

Audited

£

 

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 on 1 July 2018

(113,096)

-

-

 

Transferred to FVTOCI category on 1 July 2018

(986,476)

-

-

 

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 2018

Unaudited

£

31 December

2017

Unaudited

£

30 June

2018

Audited

£

 

FVTOCI financial instruments at the beginning of the period

-

-

-

 

Transferred from Available for sale category

986,476

-

-

 

Revaluations

(791,011)

-

-

 

FVTOCI financial assets at the end of the period (unaudited)

195,465

-

-

 

 

 

31 December 2018

Unaudited

£

31 December

2017

Unaudited

£

30 June

2018

Audited

£

 

FVTPL financial instruments at the beginning of the period

-

-

-

 

Transferred from Available for sale category

113,096

-

-

 

Disposals

(107,947)

-

-

 

FVTPL financial assets at the end of the period (unaudited)

5,149

-

-

 

 

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, £

 

 

 

 

 

 

Allotted, issued and fully paid

 

 

 

 

Deferred shares of £0.0009 each

1,788,918,926

 

1,610,027

 

A deferred shares of £0.000095 each

2,497,434,980

 

237,256

 

Ordinary shares of £0.0001 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 £0.0009 each

1,788,918,926

 

1,610,027

 

A deferred shares of £0.000095 each

2,497,434,980

 

237,256

 

Ordinary shares of £0.0001 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 £676,000 by the issue of £676,000 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 £0.0001 at a price of £0.00042 per share.  Each note has denomination of £1,000 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 £0.006 per share.  Up to £1,100,000 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:

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 £395,000;

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;

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;

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.;

From May 2019 to February 2020 Regency will make monthly payments of principal and interest amounting to US$50,000 per month;

Bullet payment of balance including interest and the aforementioned balance of the Restructuring Fee at Maturity;

Should the Company complete any financing transaction over £200,000 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. 

The Project includes 196 claims covering 40.96 square kilometres covering a mineralised trend with up to 20 kilometres of potential strike;

All points on the property lie within 1.8km of the Dempster Highway, some 65 km north of the Eagle River Lodge, northern Yukon;

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;

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");

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;

Regency Mines plc will be the operator of the Project;

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.

Principal Transaction Terms:

The CAD450,000 (agreed as equivalent to £265,548) consideration is as a result of the subscription payable in new Regency Mines plc ordinary shares at a price of £0.005  equating to 53,109,600 shares (the "Subscription Shares") and representing approximately 6.05% of the total number of issued shares post transaction.

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.

The Subscription Shares distributed to the Vendor will be subject to:

A 4 month holding period where the shares may not be traded except subject to the exceptions below:

Should RGM close at above £0.008 for 7 consecutive trading days, the Vendor has the right to sell 25% of its position.

Should RGM close at above £0.01 for 7 consecutive trading days, the Vendor has the right to sell a further 25% of its position.

In-Country Management

The Project will be held by DVY.

The Vendor will have the right to nominate two directors to the board of DVY and will appoint the company secretary & legal counsel.

All contracts of work are to be awarded to agreed technical consultants on an arm's length commercial basis.

Regency has the right to nominate two members to the Board of DVY.

Regency are to be appointed the operator of the Project.

Expenditure and Dilution

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.

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.

Vendor's Residual Interests

The residual 50% DVY interest will vest in a UK private company representing the Vendor interests.

The Vendor will receive a 3% NSR royalty (held within the above UK private company).

RGM have the right of first refusal to purchase within three months of first commercial production 1% of the NSR for cash consideration of £1,000,000.

Vendor to receive cash/equity (50:50) of CAD$250,000 upon the release of a compliant maiden resource.

Vendor to receive cash/equity (50:50) of CAD$1,500,000 upon commercial production.

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 £0.000823.  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 £0.000729.  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

 

 


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