Regency Mines Corporate Presentation
Feb-2017-RGM-CorpPres_FINAL
Feb-2017-RGM-CorpPres_FINAL
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<strong>Regency</strong> <strong>Mines</strong><br />
<strong>Corporate</strong> <strong>Presentation</strong><br />
London Stock Exchange AIM Listed: RGM
Disclaimer<br />
These presentation slides (the “Slides”) do not constitute an offer to the public or an offer for sale or solicitation to purchase or subscribe<br />
for any securities of the Company and they should not be relied on in connection with a decision to purchase or subscribe for any such<br />
securities. The Slides and the accompanying verbal presentation do not constitute a recommendation regarding any decision to sell or buy<br />
securities in the Company. If any person is in doubt as to the contents of this presentation, or wishes to obtain advice as to the investment<br />
merits of the Company’s securities, he should seek independent advice from a person who is an authorized financial services provider.<br />
No reliance may be placed for any purpose whatsoever on the information contained in the Slides and the accompanying verbal<br />
presentation or the completeness or accuracy of such information. The information contained in these Slides and the accompanying verbal<br />
presentation is in the public domain, however no representation or warranty, express or implied, is given by or on behalf of the Company,<br />
its shareholders, directors, officers or employees or any other person as to the accuracy or completeness of the information or opinions<br />
contained in the Slides and the accompanying verbal presentation, and no liability is accepted for any such information or opinions<br />
(including in the case of negligence, but excluding any liability for fraud).<br />
The Slides are not for distribution in, nor do they constitute an offer of securities for sale in, any jurisdiction where such distribution or<br />
offer is unlawful. The distribution of the Slides in some jurisdictions may be restricted by law and persons into whose possession this<br />
document comes should inform themselves about and observe any such restrictions.<br />
Statements made in the Slides and accompanying verbal presentation may include forward-looking statements that necessarily involve<br />
risks and uncertainties. Forward-looking statements may generally be identified by the use of terminology such as “may”,<br />
“will”, ”expect”, ”intend”, “plan”, “estimate”, “anticipate”, “believe”, or similar phrases. Other than statements of historical facts, all<br />
statements, including, among others, statements regarding the future financial position of the Company, business strategy, projected<br />
levels of growth in its market, projected costs, estimates of capital expenditures and plans and objectives of management for future<br />
operation, are forward-looking statements. The actual future performance of the company could differ materially from these forwardlooking<br />
statements. Important factors that could cause actual results to differ materially from these expectations including known and<br />
unknown risks. Undue reliance should not be placed on these forward-looking statements.<br />
www.regency-mines.com<br />
<strong>Regency</strong> <strong>Mines</strong> PLC : AIM RGM
Company Overview<br />
Motzfeldt<br />
Niobium + Tantalum JORC Resource<br />
Signfiicant Upside Potential<br />
Curzon Energy Plc<br />
Coal Bed Methane Project, Oregon, USA<br />
Upcoming Listing in the UK<br />
Horse Hill<br />
Onshore UK Oil and Gas Exploration<br />
Weald Basin – Gatwick Airport<br />
Mambare<br />
Nickel JORC Resource<br />
Large Scale and 3% Explored to Date<br />
Rosa Coal Mine<br />
Metallurgical Coal Production, AL, USA<br />
Mine Restart Project<br />
www.regency-mines.com<br />
<strong>Regency</strong> <strong>Mines</strong> PLC : AIM RGM
Diverse Investor Exposure<br />
Investments<br />
Oil and Gas<br />
Mining<br />
Transactions<br />
Focus on Cash<br />
Generative Assets<br />
with Outsized<br />
Returns<br />
Coal Bed Methane<br />
and Onshore UK<br />
Oil Exploration<br />
Met Coal Production<br />
Nickel in PNG and<br />
Niobium/Tantalum<br />
in Greenland<br />
Value Creation<br />
Through Joint<br />
Ventures and<br />
Disposals<br />
www.regency-mines.com<br />
<strong>Regency</strong> <strong>Mines</strong> PLC : AIM RGM
MINERAL<br />
PROJECTS
Rosa Metallurgical Coal Investment<br />
01<br />
02<br />
03<br />
04<br />
Investment in Carbon Minerals Corporation<br />
Experienced Coal Mgmt Team<br />
Existing Mine w/ Infrastructure<br />
NI 43-101 453,000 tons of Coal<br />
Very Desirable High Quality Rosa Coal<br />
Scales Well Beyond Existing Resource<br />
Located in the Warrior Coal Basin<br />
Blount Country, Alabama, USA<br />
Multiple Regional Offtake Partners<br />
Year 1 Target : 100,000 Tons of Coal<br />
Conservative: $130 Met Coal<br />
$13m in Revenue - $10.7m in EBITDA<br />
Strong Met Coal Prices<br />
20% Interest<br />
Mine Restart Project<br />
Historic Coal District<br />
Production – Cash Generation<br />
www.regency-mines.com<br />
<strong>Regency</strong> <strong>Mines</strong> PLC : AIM RGM
Rosa Mine Location and Geology<br />
SE United States – Blount County, AL<br />
Plateau Coal Field<br />
Southern Appalachian Coal Region<br />
Economic Bituminous Coal Deposits<br />
Lower Pottsvile Formation<br />
Produces High Quality Rosa Met Coal<br />
Mid Vol Coal – Low Ash / Sulphur<br />
Multiple Regional Offtake Parties<br />
Used for Filters and Coke Production<br />
Motivated Local Workforce<br />
Historic Basin<br />
One of Primary US Coal Production Areas<br />
Long History of Producing Both Thermal and Met Coal<br />
2015: 37 Operating <strong>Mines</strong> in AL – 13.2m tons Production<br />
www.regency-mines.com<br />
<strong>Regency</strong> <strong>Mines</strong> PLC : AIM RGM
Rosa Metallurgical Coal Mine<br />
Surface Mined 1960s-80s<br />
Conducted by Calvert and Marsh<br />
5m+ Tons Mined Through 1978<br />
Over 2,500 acres of Rosa Seam Mined<br />
Mining to Take Place Along Existing Highwall<br />
Simple Extraction Process<br />
Multiple Augers or Highwaller<br />
100,000 tons in Year 1<br />
120,000+ tons in Thereafter<br />
Highwaller Could Allow 600,000t+ p/a<br />
Wash Plant<br />
Equipment in Place ~$10-12m Value<br />
Wash Coal for 3 rd Parties @ $8/ton<br />
85% Clean Tons Recovery Expected<br />
Auger ($3/t)<br />
350ft Depth<br />
Highwall ($25/t)<br />
1,000ft Depth<br />
Avg Rosa Coal Quality<br />
1.81% Ash<br />
26.20 % VM<br />
71.91% FC<br />
0.85% SUL<br />
Rosa Coal Seam – Avg 16-22in Thickness<br />
www.regency-mines.com<br />
<strong>Regency</strong> <strong>Mines</strong> PLC : AIM RGM
Rosa Financial Projections<br />
Production Level<br />
2,155,540 25.00% 50.00% 100.00% 125.00% 150.00%<br />
$ 50.00 $ -97,460 $ 109,540 $ 523,540 $ 730,540 $ 937,540<br />
Coal Price $ 100.00 $ 157,540 $ 619,540 $ 1,543,540 $ 2,005,540 $ 2,467,540<br />
$ 150.00 $ 412,540 $ 1,129,540 $ 2,563,540 $ 3,280,540 $ 3,997,540<br />
$ 200.00 $ 667,540 $ 1,639,540 $ 3,583,540 $ 4,555,540 $ 5,527,540<br />
Metallurgical Coal – 2017 Consensus $143/t<br />
Assumptions<br />
Base Case: 120,000 tpa Saleable = 100%<br />
Results in USD Attributable to RGM<br />
Shareholder Agreement – 50% Div Policy<br />
Met Coal Prices Hit Multi-Year High in<br />
2016 - $308/t<br />
US Expected to Increase Coking Coal<br />
Production in 2017 +9m Tons<br />
Prices Off Highs – Still 130% Up from<br />
Multi-Year Lows<br />
www.regency-mines.com<br />
<strong>Regency</strong> <strong>Mines</strong> PLC : AIM RGM
www.regency-mines.com<br />
<strong>Regency</strong> <strong>Mines</strong> PLC : AIM RGM
Motzfeldt – Multi Element Project<br />
o JORC Inferred Mineral Resource of 340Mt @ 120ppm Ta 2 O 5 , 4,600ppm ZrO 2 , and<br />
1,850ppm Nb 2 O 5<br />
o Multi-element project - niobium (Nb), tantalum (Ta), rare earth elements (REE)<br />
– significant in-situ value<br />
o World’s largest Undeveloped Niobium-Tantalum deposits - 24km to an<br />
international airport<br />
o Acquired for Nominal Cost (~£2.5k) – Several Millions Spent Historically<br />
o Minimal Spend to Hold Licenses– On Care and Maintenance – Seeking Partners<br />
Ta<br />
Zr<br />
REEs<br />
Nb<br />
www.regency-mines.com<br />
<strong>Regency</strong> <strong>Mines</strong> PLC : AIM RGM
Mambare Nickel Laterite Project<br />
o<br />
Lateritic nickel-cobalt exploration in Mambare Plateau,<br />
PNG<br />
Plateau<br />
o<br />
o<br />
One of World’s Largest Laterite Deposits – 3% Drill Tested<br />
– Significant Upside Potential<br />
50:50 Joint Venture between RGM and Direct Nickel Ltd<br />
(Additional 1.36% indirect stake through DNI)<br />
Kokoda Township<br />
EL1390<br />
o<br />
o<br />
JORC compliant Mineral Resource Estimate (MRE)<br />
announced 2012<br />
− 162.5 Mt @ 0.94% Ni and 0.09% Co (combined<br />
Indicated & Inferred)<br />
− 47 MT @ 1.23% Ni and 0.08% Co<br />
Mambare Licensed to use the DNi Process – 40,000t p/a<br />
Direct Nickel Process<br />
Designed to Process Nickel Laterites<br />
Tested at Pilot Scale in Perth, AUS<br />
Uses Nitric Acid – Recycles 95%<br />
Sustainable and Cost Effective<br />
Low CAPEX & OPEX - Scaleable<br />
Unlocks World’s Nickel Laterite Supply<br />
www.regency-mines.com<br />
<strong>Regency</strong> <strong>Mines</strong> PLC : AIM RGM
Oil<br />
& GAS
Horse Hill Overview<br />
1,688 BOPD<br />
Cumulative Flow Test Rate<br />
(3 zones)<br />
3.25%<br />
RGM’s Stake<br />
Flow Test Results By Horizon<br />
Upper Portland<br />
Upper Kimmeridge<br />
463 BOPD<br />
323 BOPD<br />
Lower Portland<br />
900 BOPD<br />
Lower Kimmeridge<br />
Exciting onshore O&G prospect in the<br />
UK – PEDL 137<br />
Primary focus lies on Kimmeridge<br />
Limestones and Portland Sandstones<br />
90-day extended production tests<br />
planned for early 2017<br />
Permission sought for 2 x well drilling<br />
phase – deviated sidetrack of existing<br />
HH-1 well + HH-2
Horse Hill Timeline<br />
HH-1 Well<br />
Drill Results<br />
Gross Oil In Place<br />
Initial Flow Tests<br />
Long Term Flow<br />
Tests<br />
Sept 2014 Oct 2014 2015 2016 2017<br />
HH-1 drilled to 2,646m<br />
to test for conventional<br />
stacked targets and a<br />
deeper gas target<br />
Results: P50 of<br />
3.1mmbls of gross in<br />
place hydrocarbons in<br />
Upper Portland and<br />
16.8mmbbls in lower<br />
Portland<br />
Focus shifts to<br />
Kimmeridge Clays –<br />
8,262mmbls OIIP<br />
estimated<br />
1,688 BOPD – highest<br />
aggregate stable dry-oil<br />
flow from any onshore<br />
UK new field<br />
Long-term flow tests<br />
planned for Q1
Curzon Energy Plc Overview<br />
OR, USA<br />
RGM: £250k<br />
~10% Stake<br />
$20-25k to RGM<br />
Coal Bed Methane Gas Project – Acquired out of Bankruptcy<br />
645 BCF Gas in Place 273 BCF of 2C contingent resources (recoverable)<br />
Coos Bay, Oregon, USA – 50,000 acres<br />
Curzon Energy Plc to be listed in London at £4.8m valuation<br />
Historic Spend Over $75m<br />
Pre-IPO raised £650k Q3 2016<br />
IPO set to raise £2.4m+ in 2017 w/ listing on LSE<br />
Funds to Confirm Commerciality<br />
Phased development program (Typical well costs $320k)<br />
Phase 1: 2 new wells + temporary compression facility + 5 existing wells<br />
Phase 2: 58 new wells<br />
5 year plan - 200+ wells and 20-30 MMscf/day (3,000-5,000 boepd)<br />
Potential for free cash flow of $24m+ in 5 years - $250m+ valuation<br />
Base case break-even of $1.0/Mscf Henry Hub<br />
First gas in under 6 months - monthly revenue of $250k<br />
Targeting 6-7x uplift with current assets<br />
www.regency-mines.com<br />
<strong>Regency</strong> <strong>Mines</strong> PLC : AIM RGM
Curzon Development Potential<br />
5 Existing Wells<br />
Local well test rate of 100Mscf/day seen<br />
Mid case 500 MMscf per well ultimate recovery<br />
“First Gas” Expected in Under 6 Months<br />
Local gas prices $5/Mscf – $2/Mscf premium to US Henry Hub<br />
16 year track record of premium pricing<br />
Coos Bay Gas Pipeline (12in)<br />
Crosses the property / ready for connection<br />
Feeder line connects to interstate line<br />
Typical Well Costs: $350k<br />
~2,500ft depth 5-10 zones<br />
Two Horizons<br />
Upper<br />
Coaledo<br />
Phase I<br />
2 x New Wells<br />
Phase II<br />
58 x New Wells<br />
Phase III<br />
200 x New Wells<br />
Lower<br />
Coaledo<br />
www.regency-mines.com<br />
<strong>Regency</strong> <strong>Mines</strong> PLC : AIM RGM
Curzon Project - Well Economics<br />
$703k<br />
IRR<br />
108%<br />
Phase I (Mid Case)<br />
7 Wells<br />
1.8 BCF<br />
$8.3m Net Revenue<br />
$1.1m CAPEX<br />
$1.6m OPEX<br />
Payout in 1.7yrs<br />
$320k<br />
CAPEX Per Well<br />
150Mscf/day<br />
NPV10<br />
4.4 Years<br />
Payout<br />
Peak Rate<br />
IRR<br />
58.4%<br />
Phase I + II (Mid Case)<br />
65 Total Wells<br />
30.8 BCF<br />
$141m Net Revenue<br />
$19.7m CAPEX<br />
$29.4m OPEX<br />
Payout in 4.4yrs<br />
Curzon Type Well Economics – Mid Case<br />
Wells<br />
200<br />
5 Year Plan (Mid Case)<br />
130 Mscf/Day<br />
$30.9m in net annual revenue<br />
Includes Royalty, G&A, OPEX<br />
Goal is $200m valuation<br />
IRR<br />
55.4%<br />
500MMscf ultimate recovery<br />
Peak rate of 150 Mscf/day<br />
New Well Completed in Upper and<br />
Lower Coaledo with stimulation<br />
Takes advantage of low drilling costs<br />
and preconstructed pads<br />
www.regency-mines.com<br />
<strong>Regency</strong> <strong>Mines</strong> PLC : AIM RGM
Natural Gas - Coal Bed Methane<br />
10%<br />
Of US natural gas production comes<br />
from coal bed methane (CBM)<br />
Natural Gas<br />
The “Fuel of the Future” – cleanest fossil<br />
fuel option available – key component of<br />
US energy supplies and world’s fastest<br />
growing major fuel<br />
CBM<br />
Dramatic Transformation<br />
Former “Miner’s Curse” now an<br />
exciting commercial success story<br />
CBM<br />
Coal is both reservoir rock and<br />
source rock for methane<br />
Natural Gas<br />
CO2 emissions 40-50% lower than<br />
coal and 25-35% lower than<br />
petroleum<br />
Production Profile<br />
CBM fields usually increase to peak<br />
production after 6-18 months then<br />
decline like conventional reservoir<br />
o US gas production continues to increase<br />
o LNG export markets continue to grow – China, S.Korea, Japan<br />
o LNG rising 6-8%pa as countries shift to lower carbon fuels<br />
o World natural gas supply should go into deficit by end of 2016<br />
19
OTHER<br />
INVESTMENTS
Other Investments<br />
Red Rock Resources PLC (AIM:RRR)<br />
Direct Nickel<br />
1.94%<br />
Exposure to oil and gas production +<br />
mineral exploration<br />
Key Asset: Jupiter <strong>Mines</strong> producing<br />
manganese mine in South Africa<br />
2.71%<br />
75%<br />
Developer of Nickel Processing<br />
Technology<br />
Exposure to Planet Minerals Ltd –Gold<br />
Exploration in Africa<br />
Holding<br />
Gold JORC resource in Kenya<br />
Iron JORC resource in Greenland<br />
Oil Production in the USA<br />
Holding<br />
Partner at Mambare, PNG Nickel<br />
Project – RGM Indirect Stake 1.36%<br />
www.regency-mines.com<br />
<strong>Regency</strong> <strong>Mines</strong> PLC : AIM RGM
Investor Timeline and Key Events<br />
Rosa Coal Mine<br />
Commences<br />
Production<br />
February<br />
Mambare Ni<br />
Project<br />
Year 2 License Fee<br />
Paid<br />
March<br />
Horse Hill<br />
Long Term Flow<br />
Tests Begins<br />
Curzon Plc IPO<br />
London Stock<br />
Exchange<br />
www.regency-mines.com<br />
<strong>Regency</strong> <strong>Mines</strong> PLC : AIM RGM
Summary<br />
Investing at Bottom of Cycle Valuations<br />
Focus on Cash Generation<br />
Exploration Holdings w/ Upside<br />
Foundation for Outperformance<br />
www.regency-mines.com<br />
<strong>Regency</strong> <strong>Mines</strong> PLC : AIM RGM
Further Information<br />
London Stock Exchange AIM listing:<br />
AIM:RGM<br />
Share Price: 0.53p<br />
Market Capitalisation:<br />
£2.16m<br />
Shares in Issue: 407.384,571<br />
Directors:<br />
Andrew Bell<br />
Scott Kaintz<br />
Edmund Bugnosen<br />
Chairman and CEO<br />
Director and COO<br />
Non-Executive Director<br />
<strong>Corporate</strong> Advisers:<br />
Nominated Adviser<br />
Auditors<br />
AIM Broker<br />
Solicitors<br />
Beaumont Cornish Ltd<br />
Chapman Davis LLP<br />
Dowgate Capital Stockbrokers Ltd<br />
Ronaldsons LLP<br />
Company Secretary:<br />
Stephen Ronaldson
Further Information<br />
Andrew Bell<br />
Chairman and CEO<br />
Email: Andrew.Bell@regency-mines.com<br />
Scott Kaintz<br />
Director and COO<br />
Email: Scott.Kaintz@regency-mines.com<br />
Business and Postal Address:<br />
Ivybridge House<br />
1 Adam Street<br />
London<br />
WC2N 6LE UK<br />
Phone: +44 (0)207 747 9960<br />
Registered Office:<br />
55 Gower Street<br />
London<br />
WC1E 6HQ UK<br />
Incorporated in England and Wales<br />
Company No. 05227458
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